Peabody notes rally; Nine Energy gains; Talen flat; Revlon improves; CWT better; GEO up

By Cristal Cody

Tupelo, Miss., June 8 – Peabody Energy Corp.’s 6 3/8% notes due 2025 (Caa1/CCC) rallied further on Tuesday with the notes now trading 10¾ points better since the start of June.

The bonds climbed 2¼ points in heavy secondary action to 68½ bid, a source said.

Peabody’s issue jumped 5¼ points to 66¼ bid on Monday.

The St. Louis-based coal producer’s notes traded at 57¾ bid before the Memorial Day holiday and at the 54 bid area at the start of the year.

Energy bonds mixed

In other distressed energy issues, Houston-based oilfield services company Nine Energy Service, Inc.’s 8¾% notes due 2023 (Caa2/D) added 2 points to trade near the 46 bid area on Tuesday, a market source said.

The notes opened the week more than 1½ points better.

The Woodlands, Tex., and Allentown, Pa.-based power company Talen Energy Supply LLC’s 6½% senior notes due 2025 (B3/CCC+/B) were unchanged on the day at 76 bid, a source said.

The issue has softened from the 84½ bid range at the end of May and the 82 bid area at the start of the year.

Oil prices settled higher after softening on Monday.

North Sea Brent crude oil futures for August deliveries rose 73 cents to settle Tuesday at $72.22 a barrel.

West Texas intermediate crude oil benchmark futures for July deliveries improved 82 cents to settle at $70.05 a barrel, while August deliveries settled up 83 cents at $69.87 a barrel.

Overall market tone was mostly better over the day.

The iShares iBoxx High Yield Corporate Bond ETF closed up 6 cents at $87.36.

Revlon bonds up

Elsewhere in the distressed secondary market, Revlon Consumer Products Corp.’s bonds traded higher after the company closed on a $130 million secured term loan, a source said.

The New York-based cosmetics manufacturer’s 6¼% senior notes due 2024 (C/C/) rose 1¾ points to 42 bid in strong trading supply.

The notes started the year at 35 bid.

SLR Credit Solutions announced in a news release on Tuesday that it underwrote a senior secured last out term loan for Revlon with proceeds used in part to refinance existing debt.

Revlon reported in May its first-quarter operating losses dropped to $12.7 million from $186.2 million in the same quarter last year.

CWT notes on rise

Bonds from corporate travel management company CWT, formerly known as Carlson Travel Inc., continued to climb in the secondary market over the day after trading up 1¾ points on Monday, a source reported.

The Minneapolis-based company’s 11½% senior secured notes due 2026 (/CC/) improved 1¼ points to 59¾ bid.

The notes traded at 57¼ bid at the beginning of 2021.

GEO sees recovery

Meanwhile, GEO Group Inc.’s bonds continue to recover as the U.S. Justice Department cuts ties with private prison operators and after S&P Global Ratings dropped the debt ratings by two notches in May.

GEO’s 6% guaranteed senior notes due 2026 (B2/CCC) were last seen at 71¼ bid, up from 68 3/8 bid on Monday, a source said.

The issue added more than 3¼ points in the prior session.

The 6% bonds traded at the 78 bid area in early January.

GEO, a Boca Raton, Fla.-based real estate investment trust that specializes in secure and processing facilities and electronic monitoring, 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 in May.

U.S. president Joe Biden instructed the U.S. Department of Justice in January to not renew contracts with privately operated prison operators.

GEO has retained Lazard Financial Advisory and Skadden, Arps, Slate, Meagher & Flom LLP to assess various alternatives for its capital structure.

AMC edges higher

AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) headed out at 103½ bid, up 5/8 point, a source said.

The issue is trading 4¾ points better since the end of May and much higher than the 23¼ bid range at the start of 2021.

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

AMC announced in January it 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.

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