Frontier notes mixed; Moss Creek paper eyed; AMC ‘not out of woods’; Hertz climbs

By Cristal Cody

Tupelo, Miss., April 16 – Frontier Communications Corp.’s bonds headed out Friday mixed in the secondary space as the company preps to exit Chapter 11 bankruptcy soon.

Frontier’s 11% senior notes due 2025 were quoted up more than ¾ point from where the issue last traded Thursday to 70 bid late Friday afternoon on more than $2.4 million of volume, a source said.

Frontier’s 10½% senior notes due 2022 were flat at 70¼ bid on $5 million of paper traded over the session.

The Norwalk, Conn.-based telecommunications company’s 7 7/8% senior notes due 2027 traded about ¾ point higher at 66½ bid in light secondary supply of $1 million, according to the market source.

Frontier said in a news release on Thursday that it expects to emerge from bankruptcy in the “coming weeks” after receiving unanimous approval from the California Public Utilities Commission.

The company filed for Chapter 11 on April 14, 2020, and the U.S. Bankruptcy Court for the Southern District of New York confirmed the company’s plan of reorganization in August.

Under the restructuring announced in April with unsecured bondholders representing more than 75% of the company’s approximate $11 billion of outstanding unsecured bonds, Frontier expects to eliminate more than $10 billion of debt.

Frontier said the restructuring agreement leaves unimpaired all general unsecured creditors and holders of its secured and subsidiary debt.

The company’s bonds remain actively traded ahead of the bankruptcy since different structures will impact the issues through the bankruptcy process.

“Each one is going to be different,” the market source said. “It depends on where in the structure they are, what type of language they have, who are the bondholders and if they’re supporting the deals. Some of them are trading around 106, 105.”

Frontier’s 5% senior secured first-lien notes due 2028 (B3/B+) rose 3/8 point to 102 5/8 bid on $4 million of issues traded Friday, the source said.

Moss Creek mixed

Oil prices settled slightly lower on Friday.

West Texas intermediate crude oil futures for May deliveries fell 33 cents to settle at $63.13 a barrel, while June deliveries settled down 32 cents to $63.19 a barrel.

North Sea Brent crude oil futures for June deliveries declined 17 cents to settle at $66.77 a barrel.

Overall market tone was mostly stronger on Friday on better economic data.

The iShares iBoxx High Yield Corporate Bond ETF fell 18 cents, or 0.21%, to $87.30.

Offshore driller Transocean Inc.’s 7¼% senior notes due 2025 (Ca/CCC) rose more than 1½ points to the 71½ bid range on $3 million of secondary supply, a market source said.

Oil and gas exploration company Moss Creek Resources Holdings Inc.’s bonds saw thin trading following the company’s upgrade by S&P Global Ratings but remain better on the week.

Moss Creek’s 10½% notes due 2027 traded in the 92 bid range on just $240,000 of volume but up from where the notes were last seen at the start of the week around 89 bid, a source said.

The company’s 7½% senior notes due 2026 (Caa2/B) were not active during the session and were last seen on Wednesday in the 87 bid range, the market source said.

S&P upgraded the company to B- from CCC+ and the notes to B from B- on Friday.

The agency said trading prices on Moss Creek’s bonds have improved to 85 cents to 95 cents on the dollar from around 40 cents in March 2020, dampening chances of a distressed debt repurchase.

Elsewhere in the energy space, oil and gas drilling contractor Nabors Industries Inc.’s 5¾% senior notes due 2025 (Caa2/CCC-) added 1¼ points to 80 bid on just $1 million of issues traded, a source said.

AMC bonds stable

AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) steadied Friday to trade flat at 87 bid after declining more than 2 points in the prior session, according to a market source.

AMC chief executive officer Adam Aron said in comments in a YouTube media interview and released in a proxy statement with the Securities and Exchange Commission on Thursday that the company is considering issuing 500 million new shares.

AMC’s bonds have rallied since January after the company announced it had raised additional funding, including $917 million of new equity and debt capital and another $305 million through its at-the-market equity program.

The Leawood, Kan.-based movie theater owner reported in March that 98% of its U.S. locations have reopened.

“I don’t think they’re out of the woods,” one source said. “They might need to do an exchange for some paper to trade. The first-lien [notes] are yielding around 7½% and the second-lien is trading at 14%, so they’re not out of the woods.”

Hertz notes soar

In other distressed secondary trading, Hertz Corp.’s bonds continued to soar on Friday, sources reported.

The company’s 7% notes due 2028, last quoted Tuesday up 4½ points on the day at 78½ bid, traded Friday at 95 bid in heavy secondary action.

The bonds were seen at the start of 2021 in the 50 bid range.

Hertz announced on April 3 that it selected a new proposal with greater creditor support from Centerbridge Partners, LP, Warburg Pincus LLC and Dundon Capital Partners, LLC to fund its exit from Chapter 11 bankruptcy.

The Estero, Fla.-based car rental operator filed an amended Chapter 11 plan of reorganization and related disclosure statement in the U.S. Bankruptcy Court for the District of Delaware.

A hearing on the offer was held Friday.

Hertz said it would eliminate approximately $5 billion of debt, have over $2 billion of global liquidity and completely eliminate all corporate debt on its European business under the plan.

Hertz filed for Chapter 11 bankruptcy on May 22, 2020.

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