Mallinckrodt, Hertz bonds trade higher; Tullow declines; AMC Entertainment notes improve

By Cristal Cody

Tupelo, Miss., Feb. 19 – The distressed space saw bonds from bankrupt issuers Mallinckrodt plc and Hertz Corp. climb higher on Friday.

Pharmaceuticals maker Mallinckrodt plc’s 5¾% senior notes due 2022 gained 1½ points to 54¼ bid on trading volume of $8 million, a market source said.

The company filed for Chapter 11 bankruptcy in October.

In a motion filed earlier in February with the U.S. Bankruptcy Court for the District of Delaware, Mallinckrodt said it has reached an agreement with restructuring support agreement parties to pursue a plan of reorganization.

On Wednesday, the company asked the court to approve the use of cash collateral to make a $114 million prepayment on its term loans.

Hertz improves

Car rental company Hertz Corp.’s 5½% notes due 2024 climbed to 71¾ bid on Friday in heavy secondary trading, a market source said.

The notes were last seen trading Wednesday at 68 bid.

Hertz’s 7 1/8% notes due 2026 also headed out higher at 71¼ bid, better than where the notes were last seen Wednesday at 68½ bid.

Hertz filed for Chapter 11 bankruptcy in May 2020.

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

Oil prices decline

Meanwhile, overall market tone on Friday was mixed.

The iShares iBoxx High Yield Corporate Bond ETF turned positive, ending the day up 1 cent at $87.50.

Oil prices declined a second session on Friday with West Texas intermediate crude oil futures dipping back below $60 a barrel.

WTI crude oil for March deliveries fell $1.28 to settle at $59.24 a barrel.

North Sea Brent crude oil futures for April deliveries settled $1.02 lower at $62.91 a barrel.

In the secondary market, London-based oil and gas explorer Tullow Oil plc’s 7% senior notes due 2025 (Caa2/CCC+) gave back more 1½ points in trading on Friday to go out at 78¾ bid, a source said.

The notes were up 2 points on Thursday.

AMC notes gain

In other distressed secondary trading, movie theater owner AMC Entertainment Holdings, Inc.’s bonds remained better on Friday, a source said.

The company’s 12% second-lien senior secured notes due 2026 (Ca/C) were quoted up 1¾ points at 68¼ bid.

Trading volume totaled $7.5 million.

Washington Prime flat

Washington Prime Group, LP’s 6.45% notes due 2024 (C/C/C) headed into the weekend unchanged for a second day at 63¾ bid, a market source said.

The 6.45% notes due 2024 (C/C/C) have dropped nearly 10 points from where the issue traded in the same session a week earlier at 73 bid.

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

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

The Columbus, Ohio-based shopping center real estate investment trust said in the filing that it has hired legal counsel and an investment banker to help in discussions with its lenders.

Intelsat Jackson trades

Meanwhile, Intelsat Jackson Holdings SA’s bonds were mixed but mostly improving in secondary trading on Friday, a market source said.

Intelsat Jackson’s 5½% senior notes due 2023 rose to 60 1/8 bid in heavy secondary supply but remain down about 10 points from the prior week.

The company’s 9¾% senior notes due 2025 softened ½ point to 60 bid, more than 12 points softer from trading in the last week.

Parent company Intelsat SA announced a week ago that it reached a Chapter 11 bankruptcy restructuring plan after filing for bankruptcy in May 2020 in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division.

The satellite operator said the agreement with key creditors will reduce the company’s debt to $7 billion from nearly $15 billion.

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