GTT bonds active; W&T softens; Talen trades higher; Peabody flat; Washington Prime better

By Cristal Cody

Tupelo, Miss., July 13 – GTT Communications, Inc.’s bonds traded heavily on Tuesday after the company reported it received additional deadline extensions to release its financial reports.

GTT’s 7 7/8% senior notes due 2024 (D) added ½ point to head out at 11½ bid, a source said.

The notes have declined from the 40 bid area at the start of the year.

Trading in GTT’s stock was suspended on July 2, with the New York Stock Exchange announcing it would apply to delist the company’s common shares.

GTT has delayed filing with the Securities and Exchange Commission its quarterly reports for the periods ended June 30, 2020, Sept. 30, 2020 and March 31, 2021 and the 10-K report for the fiscal year ended Dec. 31, 2020, the NYSE said.

The McLean, Va.-based telecommunications and internet services provider reported Tuesday in an 8-K filing with the SEC that it received an extension under its term loan and revolving credit agreements and the forbearance agreement on the 7 7/8% notes to July 20.

GTT also entered into additional amendments, including on its priming facility credit agreement, that extended the deadlines to deliver the late reports to July 20, according to the filing.

S&P Global Ratings downgraded GTT to SD from CCC- on July 1 after the company missed a $22.6 million interest payment on the 2024 notes that was due on June 30.

GTT continues to obtain waivers from creditors until it can complete the $2.15 billion sale of its infrastructure division to private equity firm I Squared Capital, S&P said.

W&T bonds lower

Energy bonds were mixed as oil prices soared on Tuesday.

North Sea Brent crude oil futures for September deliveries jumped $1.33 to settle at $76.49 a barrel.

West Texas Intermediate crude oil benchmark futures for August deliveries climbed $1.15 to settle at $75.25 a barrel, and September deliveries jumped $1.25 to settle at $74.69 a barrel.

Houston-based oil and gas producer W&T Offshore Inc.’s 9¾% senior secured notes due 2023 (Caa2/B) fell about ¼ point to 97¾ bid, a source said.

The notes have improved from the 73 bid area in early January.

Overall market tone was soft with corporate earnings releases in focus on Tuesday.

The iShares iBoxx High Yield Corporate Bond ETF dropped 26 cents to close at $87.71.

The S&P U.S. High Yield Corporate Distressed Bond index started the week up 0.04% on Monday but has been weaker in July. The index’s month-to-date total returns are minus-1.03%.

The index has year-to-date total returns of 26.55%.

JPMorgan Chase & Co. and Goldman Sachs Group Inc. released second-quarter results on Tuesday with the other major U.S. banks posting results later in the week.

Earnings reports from utilities and industrial companies are expected over the back half of July, a market source said.

Meanwhile, the Federal Reserve’s secondary market corporate credit facility began selling corporate bonds on Monday. The Federal Reserve is expected to wind the Covid-19-sparked facility down by the end of the year.

Little market impact is anticipated since the Fed owns less than $5 billion of bonds, with all under five-year maturities, according to a BofA Securities, Inc. research note.

Talen bonds gain

Elsewhere in the distressed market, Talen Energy Supply LLC’s bonds improved after remaining weak during Monday’s session.

Talen’s 7¼% senior secured notes due 2027 (Ba3/BB-/BB) added 1¼ points to 87¾ bid Tuesday after dropping 2 points at the week’s start, a source said.

The bonds traded at 106¾ bid as the year opened and fell below par in June.

The company’s 6½% senior notes due 2025 (B3/CCC+/B) jumped 3½ points to 58½ bid during the session.

The notes sank 3 points on Monday and have declined from the 84½ bid range at the end of May and the 82 bid area at the start of the year.

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

Peabody unchanged

Peabody Energy Corp.’s 6 3/8% senior secured notes due 2025 (Caa1/D) steadied on Tuesday and went out mostly flat at 77 bid, a source said.

The notes fell ½ point on Monday following S&P’s downgrade of the issuer.

The St. Louis-based coal producer’s notes remain nearly 20 points higher since the end of May and better than where the issue started the year at 54½ bid.

On Monday, S&P downgraded Peabody’s issuer and bond ratings.

S&P said it views Peabody’s July 7 announcement of a tender offer to purchase up to $13.28 million of its 8½% notes due 2024 at a price equal to 73.84, as well as its letters-of-credit revolving facility due in 2024 at a discount, as distressed and tantamount to default.

Washington Prime improves

In the real estate space, Washington Prime Group, LP’s 6.45% notes due 2024 (C/D/CC) rose ¾ point to 66¾ bid in strong supply on Tuesday, a source said.

The bankrupt company received conditional approval of the disclosure statement for its Chapter 11 plan of reorganization, according to a filing Monday with the U.S. Bankruptcy Court for the Southern District of Texas.

Washington Prime Group Inc. filed for bankruptcy on June 13 following a forbearance period when its operating partnership missed a $23.2 million interest payment on the notes that was due Feb. 15.

The Columbus, Ohio-based shopping center real estate investment trust 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.

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