GEO bonds stem losses; Washington Prime up on extension; AMC rises; Shelf Drilling gains

By Cristal Cody

Tupelo, Miss., May 28 – GEO Group Inc.’s bonds stemmed losses in distressed secondary trading over Friday’s session.

GEO’s 5 7/8% senior notes due 2024 (B2/CCC) improved nearly 1½ points to 72¾ bid on $2 million of secondary volume, a source said.

The bonds remain down from the 77 bid area the same day a week ago and off the 83¼ bid area from the start of the year.

GEO’s 5 1/8% senior notes due 2023 (B2/CCC) added nearly ½ point to the 85½ bid range on Friday, softer than the 90½ bid area quoted in the same session last week.

The issue traded in the 91 bid area in early January.

GEO’s 6% senior notes due 2025 (B2/CCC) also improved about ¾ point to the 60½ bid area on Friday.

The issue traded at the 65 bid area a week ago and at the 81¾ bid area at the start of the year.

GEO’s bonds have softened since January after president Joe Biden instructed the U.S. Department of Justice to not renew contracts with privately operated prison operators and following S&P Global Ratings’ ratings downgrade of the private prison operator on Tuesday.

S&P dropped the bond ratings by two notches, noting 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.

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.

Washington Prime gains

Washington Prime Group, LP’s 6.45% notes due 2024 (C/D/C) rose nearly 1½ points to 64 bid on $1 million of paper traded over the short market session, a source said.

The bonds remain down from a high in the 73½ bid area seen in mid-February.

Washington Prime Group Inc. reported on Wednesday in an 8-K filing with the Securities and Exchange Commission that it received approval for another extension of a forbearance agreement over a missed payment on the 6.45% notes.

The forbearance was set to expire on Wednesday and has been extended to June 2. The company first entered into a forbearance agreement on March 16.

Washington Prime Group disclosed in February that its operating partnership withheld a $23.2 million interest payment on the 6.45% notes that was due Feb. 15.

The Columbus, Ohio-based shopping center real estate investment trust said Wednesday it continues to engage in negotiations and discussions with the forbearing noteholders and forbearing lenders to restructure its capital structure.

Earlier in May, Washington Prime reported first-quarter net losses of $55.4 million, or $2.52 per share, compared to earnings of $3.4 million, or 16 cents per share, in the same period last year.

AMC bonds head up

AMC Entertainment Holdings, Inc.’s bonds continued to improve in light secondary action on Friday, a source said.

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) headed out up 1 point at 98¾ bid on $2 million of secondary supply.

The issue is trading 7 points better on the week.

The Leawood, Kan.-based movie theater owner’s stock also climbed earlier this week, closing Thursday up 35.58% but finished Friday down 1.51%.

Earlier in May, AMC raised approximately $428 million in a registered offering of 43 million shares of class A common stock earlier.

In January, AMC raised or signed commitment letters to receive $917 million of new equity and debt capital and issued $100 million of guaranteed first-lien secured notes due 2026.

Shelf Drilling improves

Overall market tone was mixed over the short session heading into the long Memorial Day holiday weekend.

The iShares iBoxx High Yield Corporate Bond ETF declined 3 cents to close at $87.18.

Oil prices were flat to lower.

North Sea Brent crude oil futures for July deliveries settled unchanged at $69.46 a barrel.

West Texas intermediate crude oil benchmark futures for July deliveries fell 53 cents to settle at $66.32 a barrel.

In distressed energy issues, Shelf Drilling Holdings Ltd.’s 8¼% senior notes due 2025 (Caa3/CCC+) recovered slightly on Friday after declining 1¾ points in the prior session, a source said.

The notes rose ¾ point to 77½ bid.

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