Hertz mixed; AMC continues climb; Transocean flat; GEO up; Endo stable; Mallinckrodt off

By Cristal Cody

Tupelo, Miss., June 4 – Hertz Corp.’s bonds saw light secondary trading on Friday as the company works to exit Chapter 11 bankruptcy with plans to launch up to $1.65 billion of term loans in the week ahead.

Hertz’s 5½% notes due 2024 traded about ¼ point weaker at the 102¼ bid area, a source said.

The notes are down about 2 points from the same day a week ago.

The company’s 6% notes due 2028 were not active and last traded down 3/8 point on Thursday at 106 3/8 bid.

Hertz is expected to launch up to $1.65 billion of senior secured term loans following a lender call scheduled for Monday with proceeds slated to help finance the company’s plan of reorganization.

Earlier this week, the company’s bonds softened following objections to the company’s Chapter 11 bankruptcy plan from a second-lien note trustee and second-lien noteholders.

In May, Hertz Global Holdings, Inc. received court approval for 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.

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

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

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

AMC bonds up

AMC Entertainment Holdings, Inc.’s bonds continued to climb in heavy trading over Friday’s session.

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) jumped another 1½ points to 102¼ bid after gaining 3¼ points in the prior session, a source said.

The bonds have climbed from trading at 98¾ bid ahead of the holiday weekend.

AMC’s 5¾% senior subordinated notes due 2025 (Ca/C) also moved up to 82½ bid on Friday after adding 1 3/8 points to 81 5/8 bid on Thursday.

The notes traded at 76 bid in the same session last week.

AMC’s stock remains well off its 52-week low of $1.91 but fell another 6.68% to $47.91 on Friday after declining 17.92% in the previous session.

The Leawood, Kan.-based movie theater owner reopened the majority of its theaters in March within Covid-19 guidelines and raised approximately $428 million in a registered offering of 43 million shares of class A common stock in May.

Also this year, AMC said in January it raised or signed commitment letters to receive $917 million of new equity and debt capital and issued $100 million of guaranteed first-lien secured notes due 2026.

Transocean steady

Overall market tone stayed stronger following the Labor Department’s May jobs reports with the unemployment rate declining 0.3 percentage point to 5.8%.

The iShares iBoxx High Yield Corporate Bond ETF closed up 19 cents at $87.27.

Oil prices ticked higher.

North Sea Brent crude oil futures for August deliveries rose 58 cents to settle at $71.89 a barrel.

West Texas intermediate crude oil benchmark futures for July deliveries improved 81 cents to settle at $69.62 a barrel, while August deliveries added 79 cents to settle at $69.39 a barrel.

Vernier, Switzerland-based offshore driller Transocean Inc.’s 8% notes due 2027 (Ca/CCC) headed out unchanged on the day at 78½ bid after gaining 1½ points in the prior session, a source said.

GEO notes improve

In other distressed secondary trading, GEO Group Inc.’s bonds continued to improve during the session, a source said.

The company’s 5 1/8% notes due 2023 rose more than ¾ point to the 87¼ bid area.

The issue traded in the 85 bid range a week ago.

GEO’s bonds declined in the prior week on the heels of S&P Global Ratings’ downgrade of the bond ratings by two notches.

The company has borrowed all of its remaining revolving credit facility availability and is building large cash balances in a strategy that usually precedes a debt exchange, S&P said.

GEO has reported some of its federal contracts have expired following president Joe Biden’s January order to the U.S. Department of Justice to not renew contracts with privately operated prison operators.

The Boca Raton, Fla.-based real estate investment trust that specializes in secure and processing facilities and electronic monitoring has retained Lazard Financial Advisory and Skadden, Arps, Slate, Meagher & Flom LLP to assess alternatives for its capital structure.

Endo unchanged

In the distressed pharmaceuticals space, Endo Finance LLC’s 6% senior notes due 2028 (Caa2/CCC+) remained steady on the day at 68 bid in strong trading activity, according to a market source.

The notes are down more than 1 point from the the same day a week ago.

The issue traded at the start of the year in the 84 bid area.

Parent Dublin-based pharmaceuticals maker Endo International plc reported weaker first-quarter earnings and revenue in May.

Mallinckrodt softens

Bankrupt pharmaceuticals maker Mallinckrodt plc’s 4¾% notes due 2023 declined about ½ point on Friday to the 22 bid area ahead of next week’s court hearing, a source reported.

Mallinckrodt filed its Chapter 11 plan of reorganization and disclosure statement in the U.S. Bankruptcy Court for the District of Delaware on April 20.

A hearing on approval of the disclosure statement is scheduled for Tuesday.

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