Peabody rallies; Moss Creek, W&T, PBF up; Talen, Diamond Sports soft; AMC improves

By Cristal Cody

Tupelo, Miss., June 11 – Peabody Energy Corp.’s 6 3/8% notes due 2025 (Caa1/CCC) headed out Friday up nearly 14 points from where the issue last traded in the prior week.

The notes were about ¾ point to nearly 1 point better at the 74¾ bid area, a source said.

The bonds last traded at 61 bid in the prior week.

Peabody’s issue jumped 5¼ points to 66¼ bid on Monday, 2¼ points to 68½ bid on Tuesday, 3 points to 71½ bid on Wednesday and 2½ points to 74 bid over Thursday’s session.

The St. Louis-based coal producer’s notes finished May in the 57¾ bid range and traded at the 54 bid area at the start of the year.

Also on Friday, Peabody’s 8½% senior secured notes due 2024 (Caa1/CCC-) headed out up 1¼ points at 76¾ bid on $3.75 million of secondary supply during the session.

The notes were quoted in April trading at 47¼ bid.

S&P Global Ratings upgraded the company’s ratings to CCC from SD on Wednesday.

However, the ratings agency said the company’s outlook is negative, and it views Peabody’s recent trade of lower-priority common shares for its 6% senior notes due 2022 as a selective default.

Moss Creek improves

Oil and gas exploration company Moss Creek Resources Holdings Inc.’s paper remained steady to higher following Moody’s Investors Service’s upgrade this week, a source said.

The company’s 7½% senior notes due 2026 (Caa1/B) were mostly unchanged at 93¾ bid after gaining ½ point on Thursday and 1½ points on Wednesday.

The issue is up from 91¼ bid in the same session a week ago, and the notes have improved from the 76 bid area in early 2021.

Moss Creek’s 10½% notes due 2027 rose more than 1¾ points to 99¼ bid on $3 million of paper traded Friday.

The notes headed out about 3 points better on the week and stronger than the 80½ bid range seen at the start of the year.

Moody’s also changed the company’s outlook to stable from negative.

S&P upgraded the company in April.

W&T, PBF higher

Houston-based oil and gas producer W&T Offshore Inc.’s 9¾% senior secured notes due 2023 (Caa2/B) added about ¾ point to 93 bid in strong trading supply, according to a market source.

The notes are about 3¾ points higher on the week and 5 points better since the end of May.

Petroleum refiner PBF Holding Co. LLC’s 6% senior notes due 2028 (B3/B+/B+) rose about 1 point to the 74¾ bid area by the close.

Oil prices settled higher on Friday.

North Sea Brent crude oil futures for August deliveries improved 17 cents to settle at $72.69 a barrel.

West Texas intermediate crude oil benchmark futures for July deliveries added 62 cents to settle at $70.91 a barrel, while August deliveries settled up 51 cents at $70.60 a barrel.

Overall market tone was stronger.

The iShares iBoxx High Yield Corporate Bond ETF gained 3 cents to close at $87.62.

Meanwhile, The Woodlands, Tex., and Allentown, Pa.-based power company Talen Energy Supply LLC’s bonds softened about 1 point to 1¼ points during the session, a source said.

Talen’s 6½% senior notes due 2025 (B3/CCC+/B) dipped 1 point to 72½ bid on $5.65 million of issues traded.

The issue has declined from the 84½ bid area at the end of May and the 82 bid area at the start of the year.

AMC bonds stronger

AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/CCC-) continued to climb in the secondary market on Friday following S&P Global Ratings’ upgrade.

The 12% notes were quoted near the 104 bid area on $18 million of secondary volume, up from 103 7/8 bid on Thursday and 103½ bid on Wednesday, a source said.

The issue has soared from the 23¼ bid range seen at the start of 2021 as it moves out of distressed trading,

AMC’s 5¾% senior subordinated notes due 2025 (Ca/C) rose to 82 7/8 bid in light secondary trading from 82½ bid on Thursday.

The notes have gained more than 5 points since the end of May and climbed from the 17¾ bid area at the start of the year.

S&P upgraded the company’s ratings on Thursday to CCC+ from CCC.

The Leawood, Kan.-based movie theater owner has raised $1.83 billion in total equity so far this year, including nearly $818 million in gross equity proceeds in the prior week, S&P said.

AMC reported in March that it had reopened most of its U.S.-based theaters within Covid-19 compliance guidelines.

Diamond Sports declines

In other distressed secondary supply, Diamond Sports Group LLC’s bonds declined in heavy trading action on Friday, a source said.

Diamond Sports Group’s 5 3/8% senior secured notes due 2026 (B2/CCC+) fell more than 2¼ points to 74 bid on $8 million of secondary volume.

Diamond Sports’ 6 5/8% senior notes due 2027 (Caa2/CCC-) traded down 3¾ points to 57¼ bid on $7 million of trading supply.

The company’s bonds have been active on chatter of potential financing or refinancing transactions.

In February, parent Sinclair Broadcast Group, Inc. reported soft guidance for the Chesapeake, Va.-based sports broadcast group along with an interest in liability management initiatives that could include a debt exchange or redemption.

Hertz mostly flat

Hertz Corp.’s bonds saw light trading on Friday as the company readies to exit Chapter 11 bankruptcy following court approval of its plan of reorganization on Thursday.

The 6¼% notes due 2022 were mostly flat at 100¼ bid after adding 1¼ points in the prior session, a source said.

The issue traded at the 53½ bid range in early January.

Hertz announced Thursday the reorganization plan will eliminate over $5 billion of debt, including all of Hertz Europe's corporate debt, and provide more than $2.2 billion of global liquidity to the reorganized company.

Hertz plans to exit Chapter 11 bankruptcy by the end of June.

The Estero, Fla.-based car rental operator filed for Chapter 11 on May 22, 2020 in the U.S. Bankruptcy Court for the District of Delaware.

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