Hertz notes edge lower; Talen, Nine Energy, Nabors, Callon bonds soft; AMC declines

By Cristal Cody

Tupelo, Miss., March 30 – Hertz Corp.’s bonds softened in distressed secondary trading on Tuesday after the company reported it received a competing bid for the company.

The company’s 5½% notes due 2024 dipped ¼ point to 98 bid, a market source said.

The notes have climbed from trading at 53½ bid at the start of the year.

Hertz reported in court filings on Monday that it received an enhanced plan proposal from a group of investors led by Centerbridge Partners, LP, Warburg Pincus LLC and Dundon Capital Partners LLC that is competitive with the proposal it received in the company's initial plan.

On March 2, the Estero, Fla.-based car rental operator filed a joint Chapter 11 bankruptcy plan of reorganization and reported it received a $4.2 billion buyout offer from Knighthead Capital Management, LLC and Certares Opportunities LLC.

A hearing on the offer is scheduled for April 16 in the U.S. Bankruptcy Court for the District of Delaware.

Hertz said the Knighthead and Certares group has indicated a willingness to enhance their original proposal.

Hertz filed for Chapter 11 bankruptcy on May 22, 2020.

Talen bonds active

Another energy company filed for bankruptcy following exorbitant costs levied during the February Texas winter storm.

Houston-based retail power provider Entrust Energy, Inc. filed for Chapter 11 bankruptcy on Tuesday in the U.S. Bankruptcy Court for the Southern District of Texas.

Other energy companies that have filed for Chapter 11 bankruptcy due to the winter storm include Griddy Energy LLC and Brazos Electric Power Cooperative Inc.

In the secondary market, Talen Energy Supply LLC’s 6½% senior notes due 2025 (B3/CCC+/B) were heavily traded on Monday and Tuesday, a source said.

The Woodlands, Tex., and Allentown, Pa.-based power company is among energy companies impacted by the February winter storm.

Talen’s 6½% notes were quoted late afternoon at 80 7/8 bid after trading Monday in the 80½ to 81 bid range.

The issue is down slightly from 81½ bid seen in the same session last week.

Houston- and Princeton, N.J.-based NRG Energy Inc. reported earlier in March that it expects an estimated $750 million loss due to the Texas winter storm and withdrew its 2021 guidance due to new resettlement data from the Electric Reliability Council of Texas.

San Antonio electric utility CPS Energy has filed suit against Ercot and CPS’ natural gas suppliers for charging excessive prices during the storm.

Newark, N.J.-based energy supplier Genie Energy Ltd. reported spot energy prices soared from a usual $50 per megawatt hour to $9,000 per megawatt hour over the period.

Houston-based oilfield services company Nine Energy Service, Inc. reported March 8 that it expects to generate a net loss and negative adjusted EBITDA for the first quarter following major shutdowns within all its Texas service lines due to the winter storm.

Nine Energy’s 8¾% notes due 2023 (Caa2/D) were not active in the secondary market on Tuesday, a source said. The notes were last seen on March 24 at 30 bid.

The issue has declined from trading at the start of March at 50½ bid.

Oil, gas bonds weaken

Oil prices weakened over the session.

West Texas intermediate crude oil futures for May deliveries dropped $1.01 to settle at $60.55 a barrel.

North Sea Brent crude oil futures for May deliveries fell 84 cents to settle at $64.14 a barrel.

Market tone was soft on Tuesday with major stock indices ending lower.

The iShares iBoxx High Yield Corporate Bond ETF fell 21 cents, or 0.24%, to $86.76.

In the secondary market, Hamilton, Bermuda-based oil and gas drilling contractor Nabors Industries Inc.’s 5¾% senior notes due 2025 (Caa2/CCC-) declined 1 point to 74 bid, a source said.

Houston-based oil and gas company Callon Petroleum Co.’s 6 3/8% senior notes due 2026 (Caa2/CCC+) fell about ½ point to 79 bid.

AMC softens

In other distressed secondary trading, AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) dropped 1 point to 81¾ bid over the day, a market source said.

The notes have softened from trading on Friday at 83 bid and 84¼ bid in the same session a week ago.

The Leawood, Kan.-based movie theater owner reported it has reopened the bulk of its U.S. movie theaters in March.

CBL notes climb

Elsewhere, bankrupt real estate investment trust CBL & Associates LP’s 5¼% notes due 2023 rose ¼ point to 57 on Tuesday, according to a market source.

The notes have climbed from 46½ bid at the start of the month.

The Chattanooga, Tenn.-based owner and developer of malls and shopping centers reported on March 22 that it expects to eliminate $1.6 billion of debt under a new restructuring plan.

CBL and 176 affiliated companies filed for Chapter 11 bankruptcy on Nov. 1 and Nov. 2 in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.

The company received an extension through May 31 to file the new restructuring plan and an extension through July 29 to solicit votes.

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