Washington Prime bonds improve; CBL softens; Moss Creek, Nabors higher; Peabody better

By Cristal Cody

Tupelo, Miss., June 9 – Distressed real estate investment trust Washington Prime Group, LP’s bonds remained higher on Wednesday following another extension on a missed payment on the issue.

The 6.45% notes due 2024 (C/D/C) traded about 2 points better at 65 bid, a source said.

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

Washington Prime Group Inc. said in an 8-K filing with the Securities and Exchange Commission on Wednesday that it received approval for an extension of a forbearance agreement to June 14.

The company first entered into a forbearance agreement on the issue 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 REIT said it is engaged in negotiations and discussions with the forbearing noteholders and forbearing lenders to restructure its capital structure.

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.

CBL notes dip

Bankrupt real estate investment trust CBL & Associates LP’s bonds softened about ¼ point to 2¼ points on Wednesday, a source said.

CBL’s 5¼% notes due 2023 fell about 1 point to the 56½ bid area.

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 in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.

The company received approval to enter into an amended restructuring support agreement in April.

Moss Creek ticks up

Elsewhere, oil and gas exploration company Moss Creek Resources Holdings Inc.’s paper saw a bump in secondary prices on Moody’s Investors Service’s upgrade, a source said Wednesday.

The company’s 7½% senior notes due 2026 (Caa1/B) traded up 1½ points to 93¼ bid in strong activity.

The 2026 issue was quoted in the 76 bid area at the start of the year.

Moss Creek’s 10½% notes due 2027 edged up 3/8 point to 97½ bid in heavy secondary supply over the day.

The notes traded at the 80½ bid range in early 2021.

Moody’s said Wednesday that it upgraded the company’s rating to B3 from Caa1 and its senior note rating to Caa1 from Caa2. Moody’s also changed the outlook to stable from negative.

In April, S&P Global Ratings upgraded the company to B- from CCC+ and the notes to B from B-, noting chances of a distressed debt repurchase were declining.

Nabors improves

Oil prices were flat to weaker over the day.

North Sea Brent crude oil futures for August deliveries settled unchanged at $72.22 a barrel.

West Texas intermediate crude oil benchmark futures for July deliveries fell 9 cents to settle at $69.96 a barrel, while August deliveries declined 8 cents to settle at $69.79 a barrel.

Overall market tone was soft.

The iShares iBoxx High Yield Corporate Bond ETF added 7 cents to finish at $87.43.

In other oil and gas bonds active, Bermuda- and Houston-based oil and gas drilling contractor Nabors Industries Inc.’s 5¾% senior notes due 2025 (Caa2/CCC-) rose about ¼ point to 90¾ bid, a source said.

The issue was quoted at the 58¼ bid area at the start of 2021.

Peabody bonds on roll

Meanwhile, Peabody Energy Corp.’s 6 3/8% notes due 2025 (Caa1/CCC) headed out 3 points higher on the day at 71½ bid in heavy supply following an upgrade by S&P, a source said.

The bonds are trading 10½ points better week to date and 13¾ points stronger since the end of May.

Peabody’s issue jumped 5¼ points to 66¼ bid on Monday and 2¼ points to 68½ bid on Tuesday.

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.

S&P announced on Wednesday that it upgraded the company’s ratings to CCC from SD, though the bond ratings remain unchanged and the outlook is negative.

The action follows Peabody’s recent trade of lower-priority common shares for its 6% senior notes due 2022, an exchange S&P said it views as a selective default.

S&P said it would downgrade the coal company by one notch if a default appeared likely within the next six months and would drop Peabody to CC if it announced plans to purchase or exchange securities at less than the original promise and to SD if it undertook a distressed exchange.

Peabody has about $1.6 billion of funded debt, with the majority due from 2022 to 2025.

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