Hertz mixed; CWT, AMC, GEO, Peabody, Consol, Nine, Transocean up; Mallinckrodt lower

By Cristal Cody

Tupelo, Miss., June 7 – Hertz Corp.’s bonds were mixed on Monday after the company launched $1.55 billion of term loans.

The company’s 6% notes due 2028 climbed to 107 1/8 bid, a source said.

The notes last traded on Thursday at 106 3/8 bid and started the year in the 53¼ bid range.

Hertz launched senior secured term loans in two tranches following a lender call on Monday.

Proceeds are slated to help finance the company’s plan of reorganization.

A court hearing to confirm Hertz's plan of reorganization is scheduled for Thursday.

Hertz Global Holdings, Inc. received court approval in May 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 bankruptcy by June 30.

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

CWT notes gain

Meanwhile, in the Covid-19 distressed travel space, bonds from corporate travel management company CWT, formerly known as Carlson Travel Inc., gained on Monday, a source said.

The Minneapolis-based company’s 11½% senior secured notes due 2026 (/CC/) headed out at 58½ bid, up 1¾ points on the day on $3 million of trading supply.

AMC remains better

The distressed movie theater space is improving as AMC Entertainment Holdings, Inc.’s bonds saw continued gains on Monday in heavy volume, a source said.

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) rose nearly ¾ point to 102 7/8 bid on $17 million of bonds traded.

The bonds have rallied from 98¾ bid ahead of the Memorial Day holiday weekend.

The notes started the year in the 23¼ bid area.

AMC’s 5¾% senior subordinated notes due 2025 (Ca/C) also added about ¼ point to 82¾ bid on Monday.

The subordinated notes were quoted at 76¼ bid at the end of May and 17¾ bid at the start of the year.

The Leawood, Kan.-based movie theater owner raised approximately $428 million in a registered offering of 43 million shares of class A common stock in May.

Peabody notes jump

Elsewhere, St. Louis-based coal producer Peabody Energy Corp.’s 6 3/8% notes due 2025 (Caa1/CCC) jumped 5¼ points to 66¼ bid on Monday in strong trading supply, a source said.

The issue traded at 57¾ bid before the Memorial Day holiday and at the 54 bid area at the beginning of 2021.

In other distressed coal bonds trading Monday, Canonsburg, Pa.-based coal producer Consol Energy Inc.’s 11% second-lien notes due 2025 (Caa1/CCC) rose 2 points to 99 bid, a source said.

The notes are up 1 point since the end of May and improved from 81 bid in early January.

Nine, Transocean stronger

Oil prices softened on Monday.

North Sea Brent crude oil futures for August deliveries settled down 40 cents at $71.49 a barrel.

West Texas Intermediate crude oil benchmark futures for July deliveries fell 39 cents to settle at $69.23 a barrel. WTI August deliveries dropped 35 cents to settle at $69.04 a barrel.

Overall market tone was mixed on the day.

The iShares iBoxx High Yield Corporate Bond ETF rose 3 cents to $87.30.

In distressed energy issues, Houston-based oilfield services company Nine Energy Service, Inc.’s 8¾% notes due 2023 (Caa2/D) improved more than 1½ points to the 44 bid area on $2 million of secondary volume, a source said.

In other distressed energy bonds traded Monday, Transocean Inc.’s 7½% notes due 2031 (C/CCC-/) climbed about 3 points to hit 65 bid early Monday before heading out mostly unchanged in the 63¼ bid area, a source said.

The Vernier, Switzerland-based offshore driller’s 7¼% notes due 2025 (Ca/CCC) added 1½ points to trade near the 83½ bid area on $2.5 million of trading supply over the day.

GEO improves

In other distressed issues, GEO Group Inc.’s 6% guaranteed senior notes due 2026 (B2/CCC) were seen up more than 3¼ points at 68 3/8 bid on $4.5 million of trading volume, a source said.

GEO’s bonds were downgraded in May by S&P Global Ratings by two notches.

The company has borrowed all of its remaining revolving credit facility availability and is building large cash balances in a strategy that usually precedes a debt exchange, S&P said.

GEO has reported some of its federal contracts have expired following president Joe Biden’s January order to the U.S. Department of Justice to not renew contracts with privately operated prison operators.

The Boca Raton, Fla.-based real estate investment trust that specializes in secure and processing facilities and electronic monitoring has retained Lazard Financial Advisory and Skadden, Arps, Slate, Meagher & Flom LLP to assess various alternatives for its capital structure.

Mallinckrodt declines

Also Monday, bankrupt pharmaceuticals maker Mallinckrodt plc’s 4¾% notes due 2023 softened about ½ point to the 21½ bid area following postponement of a court hearing on its disclosure statement, according to a market source.

The notes went out Friday down about ½ point at the 22 bid area.

Mallinckrodt filed its Chapter 11 plan of reorganization and disclosure statement in the U.S. Bankruptcy Court for the District of Delaware on April 20.

A hearing on approval of the disclosure statement was scheduled for Tuesday but has been rescheduled to June 15, according to a court notice.

Endo trades lower

Elsewhere in the distressed pharmaceuticals space, Endo Finance LLC’s 6% senior notes due 2028 (Caa2/CCC+) fell ½ point to 68 bid over the session, a source said.

The notes went out Friday flat.

The issue traded at the start of the year in the 84 bid area.

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

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