NGL bonds rally on deal; Hertz up following court order; Peabody Energy, Frontier rise

By Cristal Cody

Tupelo, Miss., Jan. 21 – NGL Energy Partners LP’s existing bonds climbed in heavy trading volume on Thursday as the company launched a new $2.05 billion offering of first-lien senior secured notes due 2026.

NGL Energy’s 7½% senior notes due 2023 (Caa1/CCC+) jumped 10 points “on the back” of the new deal to trade up to the 92 to 92½ area over the morning, a source said.

By late afternoon, the 2023 notes had climbed as high as 94 bid and were last seen in heavy secondary action at 93½ bid, up 11½ points on the day.

On Wednesday, the notes had traded over 2 points better at 82 bid.

NGL’s 7½% senior notes due 2026 (Caa1/CCC+) also saw strong secondary volume and traded at 83 bid early Thursday, the source said.

Late afternoon, the 2026 notes were seen trading in the 82 range after climbing to as high as 83½ bid.

The 2026 notes traded Wednesday at 74 bid in light supply.

NGL’s 6 1/8% senior notes due 2025 (Caa1/CCC+) headed out up 6¼ points on the day at 82½ bid.

Moody’s Investors Service downgraded the company’s senior notes to Caa1 from B3 on Thursday.

Energy bonds mixed

Elsewhere in the energy space, distressed paper was mixed on Thursday.

Bonds from Occidental Petroleum Corp. and Navios Maritime Acquisition Corp. softened, a source said.

Navios Maritime Acquisition’s 8 1/8% notes due 2021 (B3/B-) fell 2 7/8 points to 73 1/8 bid.

Coal producer Peabody Energy Corp.’s 6 3/8% senior secured notes due 2025 (Caa1/CCC-) climbed higher over the day, a market source said.

The notes traded at 66 bid, better than where the issue was last seen in heavy secondary volume on Friday at 61¼ bid.

Peabody Energy announced Friday that it has extended a tender offer to Jan. 25 to exchange its 6% secured notes due 2022 for new 10% secured notes due 2024 and new 8½% secured notes due 2024.

Oil futures were mixed over the day.

North Sea Brent crude oil futures for March deliveries rose 2 cents to settle at $56.10 a barrel.

West Texas intermediate crude oil for March delivery settled 18 cents lower at $53.13 a barrel on Thursday.

The iShares iBoxx High Yield Corporate Bond ETF closed down 6 cents, or 0.07%, at $87.46.

Meanwhile, the S&P U.S. High Yield Corporate Distressed Bond index has month- and year-to-date total returns of 7.01% after closing Wednesday up 0.63%.

Hertz, Frontier, AMC better

In other distressed trading on Thursday, car rental company Hertz Corp.’s 5½% notes due 2024 improved to 61½ bid from 58¼ bid in the prior session, according to a market source.

Hertz filed for Chapter 11 bankruptcy in May. On Wednesday, Hertz received bankruptcy court approval to dispose of at least 121,510 lease vehicles in a master lease agreement in exchange for paying noteholders $756 million in nine equal payments of $84 million, beginning this month and concluding in September.

In other bankrupt names trading in the secondary market, Frontier Communications Corp.’s distressed paper saw gains Thursday.

The company’s 7 5/8% notes due 2024 improved ½ point to 52½ bid, a source said.

The notes were seen earlier in the week trading on Tuesday down 1½ points at 52 bid.

Frontier announced last week that it received approval from the Federal Communications Commission for its Chapter 11 bankruptcy restructuring.

The U.S. Bankruptcy Court for the Southern District of New York confirmed the company’s plan of reorganization in August. The company filed for bankruptcy on April 14.

Frontier expects to emerge from bankruptcy early in 2021.

Meanwhile, AMC Entertainment Holdings, Inc.’s bonds continued to trade better on Thursday after rallying most of the week following its announcement that it issued $100 million of guaranteed first-lien secured notes due 2026 on Friday.

The company’s 12% second-lien senior secured notes due 2026 (Ca/C) added 1½ points to trade at 36¾ bid during the session, a source said.

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