CBL notes improve; Hertz, Diamond Sports mixed; Mallinckrodt up; Endo declines

By Cristal Cody

Tupelo, Miss., May 24 – Bankrupt real estate investment trust CBL & Associates LP’s bonds climbed higher on Monday after softening on Friday.

CBL’s 5¼% notes due 2023 traded at 55 1/8 bid, up 1 1/8 points from Friday, a source said.

The company received approval on Thursday for its Chapter 11 plan of reorganization disclosure statement from the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.

The court approval includes requested modifications to the plan with a confirmation hearing scheduled for Aug. 11.

CBL also is seeking court approval to extend filing and soliciting votes on its Chapter 11 plan to Aug. 30 from May 31 and the solicitation period to Oct. 27 from July 29.

The Chattanooga, Tenn.-based owner and developer of malls and shopping centers and 176 affiliated companies filed for Chapter 11 bankruptcy on Nov. 1 and Nov. 2.

Hertz bonds mixed

Hertz Corp.’s bonds were mixed on Monday as the company moves closer to exiting Chapter 11 bankruptcy.

Hertz’s 5½% notes due 2024 were unchanged from Friday at 103¼ bid, a source said.

A week ago, Hertz Global Holdings, Inc. received court approval 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 said it is working toward a Chapter 11 exit by June 30.

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

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

Mallinckrodt mostly higher

Bankrupt pharmaceuticals maker Mallinckrodt plc’s bonds improved in light trading on Monday ahead of a court hearing on the company’s Chapter 11 bankruptcy plan of reorganization, a market source said.

The company’s 4¾% notes due 2023 rose about 1½ points from Friday to 23 bid.

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 is scheduled for Wednesday.

Mallinckrodt, which has principal offices in Dublin and St. Louis, filed for Chapter 11 bankruptcy on Oct. 12, 2020.

Endo trades lower

Elsewhere in the distressed pharmaceuticals space, Endo Finance LLC’s 6% senior notes due 2028 (Caa2/CCC+) dropped 1¼ points to 70¼ bid on more than $5 million of trading volume during the session, a source said.

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

Diamond Sports mixed

In other distressed secondary action on Monday, Diamond Sports Group LLC’s bonds were mixed.

Diamond Sports Group’s 5 3/8% senior secured notes due 2026 (B2/CCC+) fell about 1 point to 73½ bid, a source said.

Diamond Sports’ 6 5/8% senior notes due 2027 (Caa2/CCC-) rose about ½ point from Friday to 57 bid.

The company’s bonds have been active on growing expectations of financing or refinancing transactions from the company, sources report.

In February, parent Sinclair Broadcast Group, Inc. reported soft guidance for the Chesapeake, Va.-based sports broadcast group along with an interest in liability management initiatives that could include a debt exchange or redemption.

PBF notes up

Overall market tone was better as the week opened.

The iShares iBoxx High Yield Corporate Bond ETF rose 10 cents to $87.21.

Oil prices continued to climb higher on Monday after gaining on Friday.

North Sea Brent crude oil futures for July deliveries, which settled Friday up $1.33, rose $2.02 on Monday to settle at $68.46 a barrel.

West Texas intermediate crude oil benchmark futures for July deliveries jumped $2.47 on Monday to settle at $66.05 after improving $1.64 a barrel ahead of the weekend.

The S&P U.S. High Yield Corporate Distressed Bond index ended Friday down 0.11% but with month-to-date total returns of 1.57% and year-to-date total returns of 23.44%.

Energy bonds were seen edging higher on the day, a source said.

Petroleum refiner PBF Holding Co. LLC’s 6% senior notes due 2028 (B3/B+/B+) improved 7/8 point to 74 3/8 bid in light trading totaling $2 million.

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