Washington Prime falters; Hertz dips; AMC rallies; Gran Tierra up; Frontera Energy down

By Cristal Cody

Tupelo, Miss., May 18 – Washington Prime Group, LP’s bonds traded nearly 2 points lower on Tuesday after the company reported it received another forbearance regarding a missed $23.2 million interest payment.

Washington Prime Group’s 6.45% notes due 2024 (C/D/C) fell more than 1¾ points to 61 bid in heavy trading activity, a market source said.

The bonds have declined from the 73½ bid area seen in mid-February.

Washington Prime Group Inc. reported in an 8-K filing with the Securities and Exchange Commission on Tuesday that its forbearance has been extended to May 26. The forbearance agreement was set to expire on Wednesday.

Washington Prime Group disclosed in February that the operating partnership withheld a $23.2 million interest payment on the 6.45% notes that was due Feb. 15.

On May 10, Washington Prime reported first-quarter net losses of $55.4 million, or $2.52 per share, compared to earnings of $3.4 million, or 16 cents per share, in the same period last year.

The Columbus, Ohio-based shopping center real estate investment trust said in the 8-K filing that it continues to engage in negotiations and discussions with the forbearing noteholders and forbearing lenders to restructure its capital structure.

Hertz active

Hertz Corp.’s bonds were mixed but remained strong in secondary trading on Tuesday ahead of the company’s nearing Chapter 11 bankruptcy exit.

Hertz’s 5½ notes due 2024 edged ¼ point lower to 104 bid over Tuesday’s session, a source said.

The notes traded at the start of 2021 at 53½ bid.

On Monday, Hertz Global Holdings, Inc. received court approval of new sponsors Knighthead Capital Management LLC, Certares Opportunities LLC and Apollo Capital Management, LP to provide the equity capital required to finance its revised plan of reorganization and bankruptcy exit.

The Estero, Fla.-based car rental operator expects to exit Chapter 11 by June 30.

A court hearing to confirm Hertz's new 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.

AMC heads higher

In other distressed secondary action on Tuesday, AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) jumped 1¼ points to 91¾ bid, a source said.

The issue saw $3 million of secondary volume over the day.

The 12% notes traded at the start of the year at 27 bid.

AMC last week completed a registered offering of 43 million shares of class A common stock, raising approximately $428 million of new equity capital at an average price of $9.94 per share.

The Leawood, Kan.-based movie theater owner reported in January that it had raised or signed commitment letters to receive $917 million of new equity and debt capital. The company also issued $100 million of guaranteed first-lien secured notes due 2026 on Jan. 15.

Energy bonds mixed

Distressed energy bonds were mixed as oil prices lost ground on Tuesday.

North Sea Brent crude oil futures for July deliveries erased Monday’s gains and settled Tuesday down 75 cents at $68.71 a barrel.

West Texas intermediate crude oil benchmark futures for June deliveries, which rose 90 cents on Monday, declined 78 cents on Tuesday to $65.49 a barrel.

Calgary, Alta.-based oil and gas explorer Gran Tierra Energy Inc.’s 6¼% senior notes due 2025 (/B-/CCC) improved 1 7/8 points to 86¼ bid on light trading volume of about $1.8 million, according to a market source.

Toronto-based petroleum explorer Frontera Energy Corp.’s 9.7% senior notes due 2023 (/B+/B) were down more than 1¼ points near the 98¾ bid area, also on light trading supply of more than $1.3 million.

Vernier, Switzerland-based offshore driller Transocean Inc.’s 11½% senior guaranteed notes due 2027 (Caa3/CCC) traded late afternoon at 100¾ bid, down over ¾ point on $3 million of paper traded, a source said.

Overall market tone was weak over the session.

The iShares iBoxx High Yield Corporate Bond ETF dropped 20 cents to close at $86.84.

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