Talen, Gran Tierra bonds decline; Peabody, TPC, Hertz higher; Mallinckrodt softens

By Cristal Cody

Tupelo, Miss., May 20 – Talen Energy Supply LLC’s bonds dropped more than 3½ points to over 5 points in heavy distressed secondary trading on Thursday.

Talen’s 6½% senior notes due 2025 (B3/CCC+/B) shed 5½ points to hit 83 bid on more than $17.5 million of volume, a source said.

The Woodlands, Tex., and Allentown, Pa.-based power company’s 10½% notes due 2026 (B3/CCC+/B) also fell 4¼ points to 91½ bid on more than $5 million of secondary supply.

Peabody, TPC gain

Distressed energy bonds were mixed as oil prices declined a third day.

Calgary, Alta.-based oil and gas explorer Gran Tierra Energy Inc.’s 6¼% senior notes due 2025 (/B-/CCC) fell about 1¼ points to the 85 bid area, according to a market source.

The notes have softened more than 3 points week to date.

North Sea Brent crude oil futures for July deliveries, which fell $2.05 on Wednesday, settled $1.55 lower Thursday at $65.11 a barrel.

West Texas intermediate crude oil benchmark futures for June deliveries, which settled $2.13 lower the previous day, fell $1.31 to $62.05 a barrel on Thursday.

Overall market tone was better on improved economic data with stock indices closing higher.

The iShares iBoxx High Yield Corporate Bond ETF jumped 37 cents to finish the day at $86.98.

In distressed coal bonds, St. Louis-based coal producer Peabody Energy Corp.’s 6 3/8% notes due 2025 (Caa1/CCC) rose ½ point to 57½ bid in strong trading after adding 1 point on Wednesday, a source said.

Peabody’s notes have rallied from 42 bid at the end of April.

Canonsburg, Pa.-based coal producer Consol Energy Inc.’s 11% second-lien notes due 2025 (Caa1/CCC) were not active Thursday, a source said. The notes traded Wednesday up 1½ points at 98¼ bid.

The issue is up about 3¼ points month to date.

Meanwhile, Houston-based petrochemicals manufacturer TPC Group’s 10½% senior secured notes due 2024 (Caa2/CCC-/B-) climbed 2¾ points to 94½ bid on $7 million of secondary supply during the session, according to a market source.

TPC held a conference call on Thursday for holders of its 10½% notes and 10 7/8% senior secured notes due 2024, along with analysts and prospective investors.

Hertz improves

During Thursday’s session, Hertz Corp.’s 6¼% notes due 2022 rose ½ point to 103 bid in heavy trading activity, while the company’s other bonds were mostly quiet, a source said.

Hertz Global Holdings, Inc. received court approval on Monday 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.

The Estero, Fla.-based car rental operator expects to exit Chapter 11 by June 30.

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

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

Mallinckrodt dips

Bankrupt pharmaceuticals maker Mallinckrodt plc’s 5¾% notes due 2022 were down less than ¼ point and trading better than the 63¾ bid area on Thursday, a source said.

The notes have softened 4¼ points since the start of the month.

On Wednesday, the company filed a court motion for approval to sell its Vtesse assets to Mandos LLC.

Mallinckrodt has a May 26 hearing scheduled on the company’s Chapter 11 bankruptcy plan of reorganization and disclosure statement.

The company filed the plan and statement on April 20 in the U.S. Bankruptcy Court for the District of Delaware.

Mallinckrodt, which has principal offices in Dublin and St. Louis, filed for Chapter 11 bankruptcy on Oct. 12, 2020.

Endo mixed

Elsewhere in the distressed pharmaceuticals space, Endo Finance LLC’s bonds were mixed in light secondary trading, a source said.

Endo’s 5 7/8% notes due 2024 were last seen on Wednesday down about ¼ point at the 99½ bid area.

The company’s 6% senior notes due 2028 (Caa2/CCC+) traded modestly softer Thursday near the 72¾ bid area after declining 1¾ points in the previous session.

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

AMC quiet

Meanwhile, AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) were quiet in the secondary market over the day, a source said.

The notes were last seen trading Wednesday at the 91¼ bid area.

In the prior week, AMC completed a registered offering of 43 million shares of class A common stock, raising approximately $428 million of new equity capital at an average price of $9.94 per share.

The Leawood, Kan.-based movie theater owner reported in January that it had raised or signed commitment letters to receive $917 million of new equity and debt capital. The company also issued $100 million of guaranteed first-lien secured notes due 2026 on Jan. 15.

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