Frontier higher in heavy trading; Hertz, Baytex steady; Gran Tierra softens; Alpha notes sink

By Cristal Cody

Tupelo, Miss., April 23 – Frontier Communications Corp.’s bonds traded heavily Friday as the company announced it plans an April 30 exit from Chapter 11 bankruptcy.

Frontier’s 11% senior notes due 2025 rose ¾ point to 74½ bid by late afternoon, up 4½ points from the same day a week ago.

The notes have climbed from the 68 bid area at the start of the month.

The Norwalk, Conn.-based telecommunications company said in a news release on Friday that it will form a new eight-member board after the restructuring is completed. Also, Frontier’s new common stock will begin trading on the Nasdaq Stock Market on May 4 under the ticker “FYBR”.

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 plan 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.

Hertz notes flat

Meanwhile, Hertz Corp.’s bonds steadied Friday after climbing higher this week, a source said.

The company’s 5½% notes due 2024 were flat at 106¼ bid, up from 103½ bid the same day last week and much higher than the 53½ bid seen at the start of the year.

Hertz filed a fourth modified Chapter 11 bankruptcy plan of reorganization and disclosure statement on Wednesday in the U.S. Bankruptcy Court for the District of Delaware.

A hearing to confirm the new plan has been scheduled for June 10.

The plan implies a total enterprise value for the Estero, Fla.-based car rental operator of approximately $5.5 billion.

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

Baytex stable

In the distressed energy space, Calgary, Alta.-based oil and gas explorer Baytex Energy Corp.’s 8¾% senior notes due 2027 (B3/B+) headed out mostly unchanged at 93¼ bid and yielding more than 10% in light trading, a source said. The notes are up about ¼ point from a week ago.

S&P Global Ratings revised the company's outlook to stable from negative on Thursday on expectations of improved cash flow and leverage metrics over the next two years.

Market tone was stronger on Friday with stock indices and oil prices higher.

The iShares iBoxx High Yield Corporate Bond ETF closed up 23 cents to $87.37.

North Sea Brent crude oil futures for June deliveries added 71 cents to settle at $66.11 a barrel.

West Texas Intermediate crude oil futures for deliveries settled 71 cents higher at $62.14 a barrel.

In other secondary trading, Calgary, Alta.-based oil and gas explorer Gran Tierra Energy Inc.’s 7¾% senior notes due 2027 (B-/CCC) were down nearly 1 point to 83 bid late Friday, but are up 1¾ points month to date, a source said.

Alpha notes plunge

Meanwhile, Alpha Holding SA de CV’s 9% senior notes due 2025 (Caa2/CCC/CC) declined another 2 points to 32½ bid on Friday following additional ratings downgrades, a source said.

The bonds have plunged from 69½ bid in the same session a week ago.

On Tuesday, Alpha announced a restatement of its financial statements for 2018, 2019 and 2020 quarterly results due to accounting errors.

Moody’s Investors Service dropped the issuer’s ratings to Caa2 from B3 on Wednesday.

S&P downgraded the Mexico-based commercial financing company to CCC from B and placed it on CreditWatch with negative implications on Thursday.

Fitch Ratings dropped the company’s ratings to CC from B on Friday.

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