Hertz mixed as Chapter 11 exit nears; Consol, Peabody stronger; Nabors flat; Talen up

By Cristal Cody

Tupelo, Miss., May 12 – Hertz Corp.’s bonds were mixed in distressed secondary trading on Wednesday following the company’s selection of a rival bid to fund its exit from Chapter 11 bankruptcy.

The company’s 6¼% senior notes due 2022 rose ¼ point to 102½ bid in strong trading action, a source said.

Hertz’s 7% senior notes due 2028 traded at 96¾ bid, down more than 2 points from where the notes went out Tuesday.

Hertz Global Holdings, Inc. announced Wednesday that following a court-approved auction, it selected a revised proposal from affiliates of Knighthead Capital Management LLC, Certares Opportunities LLC and Apollo Capital Management, LP to provide the equity capital required to fund its revised plan of reorganization and bankruptcy exit.

The Estero, Fla.-based car rental operator reported a week ago that it received a superior proposal from the affiliates over its existing sponsors, affiliates of Centerbridge Capital Partners, LP., Warburg Pincus LLC and Dundon Capital Partners, LLC.

Hertz said a hearing will be held on Friday to approve the proposed agreements and solicitation procedures.

The company would eliminate approximately $5 billion of debt under the proposal.

Hertz said it is working toward a Chapter 11 exit by June 30.

A court hearing to confirm Hertz's plan of reorganization is scheduled for June 10.

Hertz filed for Chapter 11 bankruptcy on May 22, 2020 in the U.S. Bankruptcy Court for the District of Delaware.

The company on Friday reported total first-quarter revenue of $1.29 billion, compared to $1.92 billion a year ago.

Net income improved to $190 million from a loss of $356 million a year ago.

Coal bonds higher

Distressed coal bonds traded higher during the session, a source said.

Canonsburg, Pa.-based coal producer Consol Energy Inc.’s 11% second-lien notes due 2025 (Caa1/CCC) improved to 98 bid in heavy activity, up 1 point from Monday.

St. Louis-based coal producer Peabody Energy Corp.’s 6% senior secured notes due 2022 (Caa3/CCC-) were quoted at 87¼ bid, ½ point better than where the issue was last seen in the prior week.

Peabody’s 6 3/8% notes due 2025 (Caa1/CCC) headed out at 53 bid, up 6 points from where the notes traded a week ago.

Nabors steady

Oil prices were stronger on the day.

West Texas intermediate crude oil benchmark futures for June deliveries added 80 cents to settle at $66.08 a barrel.

North Sea Brent crude oil futures for July deliveries settled 77 cents higher at $69.32 a barrel.

Bermuda- and Houston-based oil and gas drilling contractor Nabors Industries Inc.’s 5¾% senior notes due 2025 (Caa2/CCC-) traded late afternoon unchanged at 83 bid in strong secondary volume, a market source said.

In other distressed energy issues, The Woodlands, Tex., and Allentown, Pa.-based power company Talen Energy Supply LLC’s 6½% senior notes due 2025 (B3/CCC+/B) rose ½ point to 88 bid over the day, a source said.

Overall market tone remained soft.

The iShares iBoxx High Yield Corporate Bond ETF dropped 42 cents to end at $86.62.

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