Washington Prime, Intelsat extend declines; Hertz, Frontier better on month; AMC higher

By Cristal Cody

Tupelo, Miss., Feb. 17 – Washington Prime Group, LP’s bonds saw heavy trading over Wednesday’s session and weakened further after the company disclosed its operating partnership missed an interest payment on the issue.

The 6.45% notes due 2024 (C/C/C) traded at 62½ bid going out, a market source said.

On Tuesday, the notes sank 9¼ points to 63¾ bid on trading volume of more than $21 million.

Fitch Ratings downgraded the notes on Wednesday to C from CC.

Washington Prime Group, Inc. announced in an 8-K filing with the Securities and Exchange Commission on Tuesday that the operating partnership withheld a $23.2 million interest payment on the 6.45% notes that was due on Monday.

If the payment issue is not resolved within 30 days, the missed payment will constitute a default.

Washington Prime Group said in the filing that it has hired legal counsel and an investment banker to help in discussions with its lenders.

The Columbus, Ohio-based shopping center real estate investment trust’s stock dropped another 15.22% on Wednesday to $6.35 after falling 38% during the prior session.

Intelsat Jackson weakens

Intelsat Jackson Holdings SA’s bonds remained heavily traded and continued to see losses on Wednesday in the distressed secondary space, a source said.

Parent company Intelsat SA announced Friday that it reached a Chapter 11 bankruptcy restructuring plan that would cut its debt by more than half.

Intelsat Jackson’s 5½% senior notes due 2023 declined 2¼ points to 60 bid on Wednesday. The notes are down 5¾ points from Friday and off 10¼ points from the same session a week ago.

Intelsat Jackson’s 8½% senior notes due 2024 traded at 61 to 62 bid over the day and were heading out at 62 bid, down 1¾ points from Tuesday and softer than where the issue traded Friday at 66½ to 68 bid.

The company’s 9¾% senior notes due 2025 also were quoted in late afternoon trading down at 60¾ bid.

The notes headed out Tuesday 5½ points weaker from Friday at 63½ bid.

Intelsat filed for Chapter 11 bankruptcy in May 2020 in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division.

The satellite operator said in the statement on Friday that it had reached an agreement with key creditors to reduce the company’s debt to $7 billion from nearly $15 billion.

Intelsat said it is requesting a March 17 hearing to seek court approval and establish procedures to solicit votes on the plan.

Peabody Energy soft

Market tone remained mixed for a second session on Wednesday.

The iShares iBoxx High Yield Corporate Bond ETF closed off 3 cents, or 0.03%, at $87.61.

Oil futures were stronger on Wednesday and approached market expectations of $65 a barrel.

North Sea Brent crude oil futures for April deliveries settled 99 cents higher at $64.34 a barrel.

West Texas intermediate crude oil for March deliveries jumped $1.09 to settle at $61.14 a barrel.

Offshore driller Transocean Inc.’s paper continued to see gains in trading on Wednesday, a source said.

The company’s 7½% senior notes due 2026 (Ca) rose 1½ points to 62 bid.

Coal producer Peabody Energy Corp.’s 6 3/8% senior secured notes due 2025 (Caa1/CCC-) were quoted trading heavily over the day at 54¼ bid, a source said.

The notes were not active on Tuesday but have declined 1¼ points since the end of January.

Peabody Energy completed a distressed exchange of its 6% secured notes due 2022 last month for new 10% secured notes due 2024 and 8½% secured notes due 2024.

Hertz notes up

Bankrupt car rental company Hertz Corp.’s 5½% notes due 2024 saw heavy secondary supply on Wednesday with the issue trading at 67 to 68½ bid over the day, a source reported.

The notes were quoted late afternoon at 68¼ bid, stronger than where the issue was last seen ahead of the Presidents Day holiday at 67½ bid.

The 5½% notes are trading more than 4 points better since the start of the month.

Hertz’s 7 1/8% notes due 2026 saw a heavy trade over the session at 68¼ bid, the source said. The 2026 issue traded at the start of the month at 63¾ bid.

Hertz filed for Chapter 11 bankruptcy in May 2020.

On Tuesday, the company received bankruptcy court approval for a key employee incentive plan.

In January, 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.

Frontier bonds active

In other bankrupt secondary bond supply, Frontier Communications Corp.’s 7 5/8% notes due 2024 were active on Wednesday, trading at 53¾ bid as the session closed, a source said.

The notes have gained 1½ points since the start of February.

Frontier expects to emerge from Chapter 11 bankruptcy early in 2021.

The company announced in January that it received approval from the Federal Communications Commission for its restructuring.

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

AMC 12% notes gain

In other distressed trading, movie theater owner AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) traded at 65¾ bid to better than 66½ bid going out on trading volume of more than $13 million, a source said.

The notes headed out Tuesday up 2 1/8 points at 64½ bid and traded at the start of the year at 27 bid.

AMC’s bonds have mostly been stronger since January after the company announced it had secured additional funding.

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