Endo under pressure; AMC gains; Talen extends decline; Transocean, PBF up; GEO softens

By Cristal Cody

Tupelo, Miss., July 9 – Endo Finance LLC’s bonds continued to slide in heavy distressed secondary action over Friday’s session.

Endo’s 6% senior notes due 2028 (Caa2/CCC+) traded late afternoon down about 1¼ points at the 60¾ bid area on more than $8.5 million of secondary supply, a source said.

The notes have softened in heavy trading over the week, including declining 1 7/8 points on $26.8 million of volume on Thursday and softening 2¾ points on $7 million of volume on Wednesday.

The notes have declined from the 84 bid area at the beginning of 2021.

Endo’s 9½% senior secured notes due 2027 dropped 1 1/8 points to 97¾ bid by the close on Friday on over $10.5 million of secondary supply.

The notes sank more than 2 points to close Thursday at 99½ on more than $18 million in reported volume.

Endo is facing several lawsuits related to its role in the opioid epidemic.

Parent Dublin-based pharmaceuticals maker Endo International plc will release second-quarter results on Aug. 5.

The company reported soft first-quarter earnings and revenue in May.

Mallinckrodt weakens

Bankrupt pharmaceuticals maker Mallinckrodt plc’s paper was flat to softer on Friday.

The 4¾% notes due 2023 fell more than 1½ points to 23 bid, a source said.

The bonds opened the year at the 6 bid area.

Mallinckrodt filed a new joint Chapter 11 plan of reorganization and received conditional approval of its disclosure statement on June 16.

A hearing to confirm the plan is scheduled for Sept. 21-22.

The company, based in Dublin and St. Louis, filed for Chapter 11 bankruptcy on Oct. 12, 2020 in the U.S. Bankruptcy Court for the District of Delaware.

Washington Prime better

Washington Prime Group, LP’s 6.45% notes due 2024 (C/D/CC) were on the mend on Friday and headed out up ¾ point at 66 bid, a source said.

The notes last traded on Thursday at 65¼ bid.

Washington Prime received final court approval on Thursday to access a loan, as well as court approval for the bid procedures for its assets.

Washington Prime Group Inc. filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas on June 13.

The company secured a $100 million non-amortizing multiple draw super-priority senior secured debtor-in-possession term loan facility from the consenting creditors to support daily operations.

A hearing on approval of the company’s Chapter 11 disclosure statement is scheduled for Monday.

The bankruptcy filing followed a forbearance period after the Columbus, Ohio-based shopping center real estate investment trust missed a $23.2 million interest payment on the 6.45% notes that was due Feb. 15.

AMC bonds gain

Meme stock contender AMC Entertainment Holdings, Inc.’s bonds improved during the session as the company moves out of the distressed space.

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) rose 1/8 point to 99 3/8 bid on $14.25 million of trading activity, a source said.

The issue started the year in the 23¼ bid range.

The Leawood, Kan.-based movie theater operator has raised about $1.83 billion in total equity so far this year, according to S&P Global Ratings.

Talen heads down

Talen Energy Supply LLC’s bonds sank nearly 2 points to 2½ points on Friday.

Talen’s 6½% senior notes due 2025 (B3/CCC+/B) dropped 2½ points to 58 bid on $5 million of paper traded on Friday, a source said.

The notes fell 2 points on Tuesday, ½ point on Wednesday and were off 2½ points on Thursday.

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

Talen’s 10½% senior notes due 2026 (B3/CCC+/B) fell more than 1¾ points to the 64 bid area on $1 million of secondary volume during the session.

The notes softened 3 points on Tuesday, shed ¼ point on Wednesday and traded down about 3 points on Thursday.

The bonds traded at 91 bid at the end of May and the 89 bid area in early January.

Also Friday, Talen’s 7 5/8% senior secured notes due 2028 (Ba3/BB-/BB) traded nearly 2 points lower at 87 bid on $4.5 million of trading volume.

The Woodlands, Tex., and Allentown, Pa.-based power company’s outlook was dropped to negative from stable on June 16 by Moody’s Investors Service.

Transocean, PBF higher

Transocean Inc.’s bonds improved after weakening in the prior two sessions as oil prices climbed.

Transocean’s 7½% senior notes due 2031 (C/CCC/) jumped 1¾ points to 75¾ bid on $1.5 million of secondary supply, a source said.

The notes dropped 2¾ points on $1 million of trading supply on Thursday and fell more than 1¾ points on $5 million of secondary volume on Wednesday.

S&P raised the Vernier, Switzerland-based offshore driller’s issuer and bonds ratings on Wednesday but noted the company’s potential to undertake additional distressed transactions over the next year.

Also Friday, PBF Holding Co. LLC’s 6% senior notes due 2028 (B3/B+/B+) traded more than 1 point better at 66¼ bid on more than $3.6 million of secondary volume, a source said.

The issue from the Calgary, Alta.-based subsidiary of Parsippany, N.J.-based petroleum refiner PBF Energy Inc. remains higher than where the notes traded at the 56¾ bid area at the start of the year.

Oil prices ended Friday more than $1 higher.

North Sea Brent crude oil futures for September deliveries rose $1.43 to settle at $75.55 a barrel.

West Texas Intermediate crude oil benchmark futures for August deliveries settled $1.62 higher at $74.56 a barrel, and September deliveries climbed $1.59 to settle at $73.81 a barrel.

Overall market tone was better on the day after softening on Thursday.

The S&P U.S. High Yield Corporate Distressed Bond index closed Thursday down 0.89% and with month-to-date total returns of negative 0.99% and year-to-date total returns of 26.6%.

The iShares iBoxx High Yield Corporate Bond ETF closed Friday up 15 cents at $88.00.

GEO notes slip

In other distressed secondary action, GEO Group Inc.’s 6% guaranteed senior notes due 2026 (B2/CCC) shed gains made in the prior session, a source said on Friday.

The notes fell more than 2 points to the 83 bid area on $2 million of trading activity.

GEO’s bonds had rallied nearly 2½ points on $2 million of trading volume on Thursday.

The notes have improved from where the issue was quoted on June 21 at 74¼ bid.

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

GEO’s bonds softened in the first half of the year as the U.S. Justice Department moved in January to cut ties with private prison operators and S&P dropped the company’s debt ratings by two notches in May.

The 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.

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