Hertz improves; Washington Prime gains; Peabody Energy down; theater operators in focus

By Cristal Cody

Tupelo, Miss., Feb. 23 – Bankrupt car rental company Hertz Corp.’s 5½% notes due 2024 jumped 4 points in secondary trading on Tuesday.

The 5½% notes rallied to 79 bid after gaining 3¼ points on Monday, a source said.

Hertz filed for Chapter 11 bankruptcy in May.

The case is ongoing with the company receiving bankruptcy court approval for a key employee incentive plan last week.

Washington Prime recovers

Distressed Washington Prime Group, LP’s 6.45% notes due 2024 (C/C/C) recovered ground on Tuesday with the issue trading about 7 points higher at 70 bid in strong secondary supply, a market source said.

The notes headed into the weekend nearly 10 points softer on the week at 63¾ bid.

Washington Prime Group, Inc. announced a week ago in an 8-K filing with the Securities and Exchange Commission that the operating partnership withheld a $23.2 million interest payment due on the 6.45% notes.

If the company fails to resolve the issue within 30 days, the missed payment will constitute a default.

The Columbus, Ohio-based shopping center real estate investment trust said in the filing that it has hired legal counsel and an investment banker to help in discussions with its lenders.

Energy issues mixed

Coal producer Peabody Energy Corp.’s 6 3/8% senior secured notes due 2025 (Caa1/CCC-) traded at 52½ bid on Tuesday, ¼ point better than where the issue was last seen in heavy trading on Thursday, a source said.

The notes have softened since the start of the month when they traded at 59 bid.

Peabody Energy completed a distressed exchange of its 6% secured notes due 2022 in January for new 10% secured notes due 2024 and 8½% secured notes due 2024.

Oil prices were mixed on Tuesday after climbing more than $2 on Monday.

North Sea Brent crude oil futures for April deliveries rose 13 cents to $65.37 a barrel.

West Texas intermediate crude oil for April deliveries fell 3 cents to settle the day at $61.67 a barrel.

Average oil prices in 2020 were $39 a barrel, according to Fitch Ratings.

Offshore driller Transocean Inc.’s 7½% senior notes due 2026 (C/CCC-/) were seen trading at 64¼ to 63½ bid over the day, according to a market source.

The notes headed out Monday up 1 point at 64 bid.

Energy Transfer Operating LP’s 3.223% junior subordinated notes due 2066 (Ba1) fell more than 4 points to 59¼ bid during the session, a source said.

Overall market tone was mixed.

The iShares iBoxx High Yield Corporate Bond ETF recovered 20 cents, or 0.23%, on Tuesday to end at $87.44 after declining 27 cents in the prior session.

Theater notes active

In other distressed secondary trading, movie theater owner AMC Entertainment Holdings, Inc.’s bonds continued to gain on Tuesday on the heels of New York City’s plans to reopen theaters on March 5 at 25% capacity.

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) improved 1 point to 74½ bid after climbing more than 4½ points on Monday, a source said.

Elsewhere, cinema advertiser National CineMedia LLC’s 5¾% senior notes due 2026 (Caa3/CCC-) fell 1¾ points to 86 bid over the session, according to a market source.

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