PBF higher; Transocean, NGL, Talen, Nabors decline; Peabody rallies; Hertz softens

By Cristal Cody

Tupelo, Miss., May 13 – Distressed energy bonds headed out mixed in the secondary market as oil prices sank over Thursday’s session.

Parsippany-Troy Hills, N.J.-based petroleum refiner PBF Holding Co. LLC’s 6% senior notes due 2028 (B3/B+/B+) traded over ¼ point better in the 78 bid range on more than $15 million of volume, a source said.

The notes added nearly 3 points over the prior week on $58 million of paper traded, according to a BofA Securities, Inc. research note.

Meanwhile, offshore driller Transocean Inc.’s bonds traded about 1½ to 2¼ points weaker Thursday, a source said.

The company’s 7½% senior notes due 2026 (Ca) declined 1½ points to 82 bid on light volume totaling $1 million.

Transocean’s 11½% senior guaranteed notes due 2027 (Caa3/CCC) fell ½ point to 101½ bid but are up 2 points from the same session last week.

The 11½% notes rallied more than 3½ points over the past week on $125 million of secondary volume, BofA said.

Tulsa, Okla.-based diversified midstream services provider NGL Energy Partners LP’s 7½% senior notes due 2026 (Caa1/CCC+) were seen down about ½ point to 89¼ bid on Thursday, according to a market source. The notes are ½ point lower from the same session a week ago.

The Woodlands, Tex., and Allentown, Pa.-based power company Talen Energy Supply LLC’s 6% senior notes due 2036 (B3/CCC+/B) headed out nearly 1¼ points weaker at 65 bid on more than $2 million of trading supply, a source said.

Bermuda- and Houston-based oil and gas drilling contractor Nabors Industries Inc.’s 5¾% senior notes due 2025 (Caa2/CCC-) also softened about ½ point to 82½ bid over the day, according to a market source. The notes are down about ¾ point from the same session a week ago.

West Texas intermediate crude oil benchmark futures for June deliveries settled $2.26 lower at $63.82 a barrel.

North Sea Brent crude oil futures for July deliveries dropped $2.27 to settle Thursday at $67.05 a barrel.

Overall market tone was positive as stocks improved.

The iShares iBoxx High Yield Corporate Bond ETF gained 31 cents to close at $86.93.

In other energy issues, St. Louis-based coal producer Peabody Energy Corp.’s 6 3/8% notes due 2025 (Caa1/CCC) added nearly 2¼ points to trade at the 55½ bid area in thin volume, a source said. The notes are 11¼ points higher from the same session last week.

Hertz trades lower

Hertz Corp.’s bonds traded lower on Thursday, a day after the company announced it selected a rival bid to fund its exit from Chapter 11 bankruptcy and ahead of a court hearing to approve the agreement.

Hertz’s 5½% notes due 2024 fell about ½ point to 102½ bid, a source said. The issue traded as high as 106 bid in the prior week.

Hertz Global Holdings, Inc. announced Wednesday that it selected a revised proposal from affiliates of Knighthead Capital Management LLC, Certares Opportunities LLC and Apollo Capital Management, LP to provide the equity capital required to fund its revised plan of reorganization and bankruptcy exit.

The Estero, Fla.-based car rental operator said a hearing will be held on Friday to approve the new proposed agreements and solicitation procedures.

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

Hertz said it is working toward a Chapter 11 exit by June 30.

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

AMC up after offering closes

Elsewhere in the distressed space, AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) improved 1 5/8 points to 89 7/8 bid on $9 million of volume on Thursday, a source said.

The 12% notes traded at the start of the year at 27 bid.

AMC announced during the session that it completed its previously reported registered offering of 43 million shares of class A common stock that was launched on April 29.

The company said it raised approximately $428 million of new equity capital, before commissions and fees, at an average price of $9.94 per share.

“Bringing in an additional $428 million of new equity capital will immediately buttress and fortify our liquidity profile,” AMC chief executive officer and president Adam Aron said in the news release. “The additional cash raised puts AMC in a stronger position to tackle the challenges and capitalize on the opportunities that lie ahead.”

The Leawood, Kan.-based movie theater owner has reopened the majority of its U.S. locations.

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