Hertz mixed on amended plan; Frontier notes trade higher; Transocean, Valaris improve

By Cristal Cody

Tupelo, Miss., April 19 – Hertz Corp.’s bonds traded mostly flat to softer on Monday following the company’s amended Chapter 11 bankruptcy plan filed Friday.

The 7% notes due 2028 fell 2 points to 93 bid, but remain higher than where the issue traded in the same session a week ago at 74 bid, a source said.

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

Hertz filed an amended Chapter 11 bankruptcy plan and disclosure statement on Friday in the U.S. Bankruptcy Court for the District of Delaware.

The amended plan sponsors include Warburg Pincus LLC, Centerbridge Partners LP and Dundon Capital Partners LLC, as well as initial consenting holders of the company’s 6¼% senior notes due 2022, 5½% senior notes due 2024, 7 1/8% senior notes due 2026, 6% senior notes due 2028 and obligations under the company’s credit agreement dated Dec. 13, 2019.

A hearing on the offer will be held April 21.

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

Frontier notes gain

Frontier Communications Corp.’s bonds headed up in strong secondary activity on Monday, a source said.

Frontier’s 10½% senior notes due 2022 rose ½ point to 70¾ bid after the notes headed out Friday flat.

The Norwalk, Conn.-based telecommunications company announced Thursday that it expects to emerge from Chapter 11 bankruptcy soon.

Frontier filed for Chapter 11 on April 14, 2020 in the U.S. Bankruptcy Court for the Southern District of New York.

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.

Frontier’s 11% senior notes due 2025 improved 1 point to 71 bid in secondary trading on Monday, the market source said. The notes had climbed ¾ point during Friday’s session.

Frontier’s 7 7/8% senior notes due 2027 also traded ½ point higher to 67 bid after gaining about ¾ point on Friday.

Transocean better

Oil prices improved Monday after settling slightly lower on Friday.

West Texas intermediate crude oil futures for May deliveries settled up 25 cents to $63.38 a barrel, while June deliveries rose 24 cents to settle at $63.43 a barrel.

North Sea Brent crude oil futures for June deliveries settled 28 cents higher at $67.05 a barrel on Monday.

In the distressed oil and gas space, offshore driller Transocean Inc.’s 7¼% senior notes due 2026 (Ca/CCC) traded about 1 point better at the 71 bid area, a source said.

Overall market tone was softer with major stock indices all trending lower.

The iShares iBoxx High Yield Corporate Bond ETF closed down 12 cents to $87.18.

The S&P U.S. High Yield Corporate Distressed Bond index ended Friday up 0.1% and with a 1.41% month-to-date total return and an 18.53% year-to-date total return.

Valaris notes active

Bankrupt offshore drilling contractor Valaris plc’s bonds were active in thin trading on Monday, a market source said.

The company’s 8% notes due 2024 traded as high as 9¼ bid early in the session before heading out near the 6¾ bid area.

The notes were last seen at the 6 bid area on April 9.

Valaris announced in March that it received approval for its Chapter 11 plan of reorganization in the U.S. Bankruptcy Court for the Southern District of Texas Houston Division.

The company will eliminate $7.1 billion of existing debt under the plan and receive a $520 million capital injection through the issuance of a $550 million secured note due 2028.

Valaris filed for bankruptcy on Aug. 19, 2020.

AMC declines

In other distressed secondary trading, AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) fell 1 point to 86 bid after holding steady on Friday, according to a market source.

The notes have softened from trading at the 89 bid area in the same session last week.

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

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 $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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.