Hertz mixed; Washington Prime declines; Moss Creek gains; Peabody higher; AMC better

By Cristal Cody

Tupelo, Miss., June 10 – Hertz Corp.’s bonds were mixed after the company’s Chapter 11 bankruptcy plan of reorganization received court approval on Thursday.

The 6¼% notes due 2022 rose 1¼ points to 100¼ bid, a source said.

The issue traded at the 53½ bid range in early January.

Hertz’s 5½% senior notes due 2024 were quoted at 101 bid in thin volume over the day.

The notes were last seen ending the prior week at the 102¼ bid area.

The 2024 notes have improved from 53½ bid at the start of the year.

Hertz said in a news release on Thursday the plan will eliminate over $5 billion of debt, including all of Hertz Europe's corporate debt, and will provide more than $2.2 billion of global liquidity to the reorganized company.

Hertz plans to exit Chapter 11 bankruptcy by the end of June.

On Monday, the company launched $1.55 billion of senior secured term loans in two tranches with proceeds slated to help finance the company’s plan of reorganization.

Hertz Global Holdings, Inc. received court approval in May 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 filed for Chapter 11 on May 22, 2020 in the U.S. Bankruptcy Court for the District of Delaware.

Washington Prime slips

Distressed real estate investment trust Washington Prime Group, LP’s bonds fell about 1 point on Thursday, splitting its gains on Wednesday, a source said.

The 6.45% notes due 2024 (C/D/C) were quoted late afternoon at 64 bid after the notes traded about 2 points better at 65 bid in the prior session.

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

Washington Prime Group Inc. reported in an 8-K filing with the Securities and Exchange Commission on Wednesday that it received approval to extend its forbearance on a missed payment on the issue 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.

Peabody pushes higher

Peabody Energy Corp.’s 6 3/8% notes due 2025 (Caa1/CCC) continued to trade higher in the secondary market on Thursday, heading out up 1½ points at 73 bid, a source said.

The issue traded at 61 bid in the same session a week ago.

Peabody’s issue jumped 5¼ points to 66¼ bid on Monday, 2¼ points to 68½ bid on Tuesday and 3 points to 71½ bid on Wednesday.

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 Global Ratings announced on Wednesday that it upgraded the company’s ratings to CCC from SD.

The ratings agency said it views Peabody’s recent trade of lower-priority common shares for its 6% senior notes due 2022 as a selective default.

S&P said the company’s outlook is negative.

Moss Creek up

In other energy issues, oil and gas exploration company Moss Creek Resources Holdings Inc.’s paper remained better Thursday following Moody’s Investors Service’s upgrade in the prior session, a source said.

The company’s 7½% senior notes due 2026 (Caa1/B) rose ½ point to 93¾ bid.

The issue added 1½ points in the prior session and has climbed from the 76 bid area at the start of the year.

Moody’s said Wednesday that it raised 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.

The company was upgraded by S&P in April.

Oil prices improved over the session.

West Texas intermediate crude oil benchmark futures for July deliveries rose 33 cents to settle at $70.29 a barrel, while August deliveries settled 30 cents higher at $70.09 a barrel.

North Sea Brent crude oil futures for August deliveries settled up 30 cents at $72.52 a barrel.

Overall market tone was stronger.

The iShares iBoxx High Yield Corporate Bond ETF closed up 16 cents at $87.59.

AMC edges upward

In other secondary trading, AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/CCC-) were slightly higher at 103 7/8 bid after going out at 103½ bid in the prior session, a source said.

The issue has climbed from the 23¼ bid range at the start of 2021.

S&P upgraded the company’s ratings on Thursday to CCC+ from CCC.

The Leawood, Kan.-based movie theater owner raised nearly $818 million in gross equity proceeds in the prior week and has raised about $1.83 billion in total equity so far this year, S&P notes.

S&P said the company’s “debt is no longer trading at distressed levels and we believe a subpar debt restructuring is less likely in the near future.”

AMC reported in March that it had reopened most of its U.S.-based theaters within Covid-19 compliance guidelines.

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