Distressed Credit Digest

June 28, 2020

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Distressed/High Yield Watchlist

Tracking 239 credits from 145 companies
Click here for the full watchlist

Added (No new companies)
None

Removed (No removed companies)
None

Top Movers for the Week

Bottom Movers for the Week

Highlights

American Airlines (AAL) issued $2.5B of new secured debt at a discount to yield 12% this week. The remaining unsecured notes were weaker again. AAL 5.00 ’22 fell 14pts to 57 while AAL 3.75 ’25 fell 12pts to 46.50, both back near their all-time lows.

Viking Cruises (VIKH 5.875 ’21) traded lower by 10pts to 60 yielding 15.2% as cruise line related equity and credit were weaker.

Fresh Markets (TFM 9.75 ’23) bonds traded up 8.50pts to 84.50 on the back of earnings and now yielding 16.8%.

‣ Retail names like Macys (M) and Staples (SPLS) were weaker this week as Covid cases continue to rise. Macys (M 3.625 ’24) were down 7pts to 72 while Staples (SPLS 7.50 ’26) were down 6.50pts to 80.

W&T Offshore (WTI) continues to trade higher as its disclosed it purchased a total of 72.6M of its senior second lien notes at a discount. Since the beginning of April, the company average cost on bond buyback was ~34. On Friday, those bonds closed at 69 yielding 23.7%.

CEC Entertainment filed for bankruptcy this week. Its Chuck E. Cheese entertainment centers remain seriously impacted by Covid. CEC 8.00 ’22 notes ended the week unchanged at 12.

 


2020 Mid-Year Bankruptcy Recap

As we reach the halfway point of the year, I thought it would interesting to compile a list of businesses that have filed for bankruptcy this year.

Nearly all the companies listed below filed with over $100M in assets and liabilities. Here is the month by month recap, starting from the most recent.


June 2020

Filing date Name Industry
6/28/20 Chesapeake Energy (CHK) Oil & Gas — E&P
6/25/20 Sable Permian Resources, LLC Oil & Gas — E&P
6/24/20 CEC Entertainment, Inc. Entertainment & Leisure
6/24/20 Jason Industries, Inc. (JASNQ) Industrial Machinery
6/23/20 GNC Holdings, Inc. (GNC) Retail
6/20/20 AAC Holdings, Inc. (AACH) Health Care
6/17/20 Chisholm Oil and Gas Operating, LLC Oil & Gas — E&P
6/15/20 24 Hour Fitness Worldwide, Inc. Entertainment & Leisure
6/15/20 Proteus Digital Health, Inc Health Care
6/15/20 Pyxus International, Inc. (PYXSQ) Tobacco
6/14/20 Interactive Health Solutions, Inc. Health Care
6/14/20 Extraction Oil & Gas, Inc. (XOGAG) Oil & Gas — E&P
6/14/20 Skillsoft Corporation Software & Services
6/9/20 Vista Proppants and Logistics, Inc. Oil & Gas Services
6/3/20 APC Automotive Technologies Intermediate Holdings Auto & Auto Parts
6/1/20 Libbey Glass Inc. (LBYYQ) Consumer Products
6/1/20 Templar Energy LLC Oil & Gas — E&P

 

Chesapeake Energy (CHK) finalized its Restructuring Support Agreement (RSA) with lenders and filed to restructure its business and address its massive debt load. More details about the RSA will come on Monday. Article Link

GNC Holdings, Inc. (GNC) entered bankruptcy with plans to close 800-1200 stores and possibly sell itself. Article Link


May 2020

Filing date Name Industry
5/29/20 LVI Intermediate Holdings, Inc Health Care
5/27/20 PQ New York, Inc. Food & Restaurants
5/27/20 Tuesday Morning Corporation (TUESQ) Retail
5/26/20 LATAM Airlines Group S.A. (LTMAQ) Travel
5/26/20 Advantage Holdco, Inc. Travel
5/22/20 Unit Corporation (UNTCQ) Oil & Gas — E&P
5/22/20 The Hertz Corporation (HTZ) Travel
5/20/20 Akorn, Inc. (AKRXQ) Health Care
5/19/20 Exide Holdings, Inc. Auto & Auto Parts
5/19/20 Hornbeck Offshore Services, Inc. (HOSSQ) Oil & Gas Services
5/18/20 Centric Brands Inc. (CTRCQ) Consumer Products
5/15/20 Gavilan Resources, LLC Oil & Gas — E&P
5/15/20 J. C. Penney Company, Inc. (JCPNQ) Retail
5/14/20 Ultra Petroleum Corp. (UPLCQ) Oil & Gas — E&P
5/14/20 Intelsat S.A. (INTEQ) Telecommunications
5/10/20 Stage Stores, Inc. (SSINQ) Retail
5/10/20 Avianca Holdings S.A. (AVHOQ) Travel
5/7/20 Neiman Marcus Group LTD LLC Retail
5/6/20 John Varvatos Enterprises, Inc. Retail
5/4/20 GGI Holdings LLC Entertainment & Leisure
5/4/20 Permico Midstream Partners LLC Oil & Gas Storage & Transportation
5/4/20 Chinos Holdings, Inc. Retail

 

‣ During May, we saw a lot retail bankruptcies. Department stores like Neiman Marcus, Stage Stores, and J.C. Penny as well as speciality retail names like John Varvators and JCrew (Chinos).

PQ New York, an owner and operator of bakeries and dining services such as Le Pain Quotidien filed for bankruptcy protection in May. They recently agreed to sell the business. Article Link

Hertz (HTZ) filed for bankruptcy causing its top shareholder, Carl Ichan to sell his ~40% stake for a $2B+ loss. speculators and retail investors took the stock as high as $5.50 before closing at $1.50 on Friday. Which was still 100% higher than where Icahn sold.


April 2020

Filing date Name Industry
4/26/20 Diamond Offshore Drilling, Inc. (DOFSQ) Oil & Gas Services
4/25/20 Cinemex USA Real Estate Holdings, Inc Entertainment & Leisure
4/23/20 Speedcast International Limited (SPPDQ) Telecommunications
4/14/20 Frontier Communications Corporation (FTRCQ) Telecommunications
4/14/20 Longview Power, LLC Utilities
4/13/20 LSC Communications, Inc. (LKSDQ) Commerical Services
4/13/20 True Religion Apparel, Inc. Retail
4/12/20 Pace Industries, LLC Metals and Mining
4/8/20 TZEW Holdco LLC Entertainment & Leisure
4/7/20 Quorum Health Corporation (QHCCQ) Health Care
4/1/20 Whiting Petroleum Corporation (WLL) Oil & Gas — E&P

 

Frontier Communications (FTR) entered into bankruptcy as it looked to reduce its borrowings by more than $10 billion.. Article Link

Whiting Petroleum Corporation  (WLL) filed in April with the consent of the majority of lenders, while also giving current stockholders a small recovery when it plans to emerge in August. Article Link


March 2020

Filing date Name Industry
3/31/20 Dean & DeLuca New York, Inc. Food & Restaurants
3/27/20 Oneweb Global Limited Telecommunications
3/24/20 Oak Street Redevelopment Corporation Media
3/24/20 Echo Energy Partners I, LLC Oil & Gas — E&P
3/23/20 Sheridan Holding Company Oil & Gas — E&P
3/16/20 Internap Technology Solutions Inc. Telecommunications
3/12/20 Rochester Drug Cooperative Health Care
3/11/20 Modell’s Sporting Goods, Inc Retail
3/10/20 Foresight Energy LP (FELPQ) Coal
3/9/20 Bluestem Brands, Inc. Retail
3/8/20 Art Van Furniture, LLC Retail
3/3/20 Craftworks Parent LLC Food & Restaurants
3/1/20 Pioneer Energy Services Corp. (PESX) Oil & Gas Services


February 2020

Filing date Name Industry
2/20/20 Arena Football League LLC Entertainment & Leisure
2/17/20 Pier 1 Imports, Inc. (PIRRQ) Retail
2/13/20 The McClatchy Company (MNIQQ) Media
2/12/20 RentPath Holdings, Inc. Commerical Services
2/11/20 Murray Metallurgical Coal Holdings, LLC Coal
2/7/20 American Commercial Lines Inc. Travel
2/5/20 GenCanna Global USA, Inc. Health Care

 

Pier 1 Imports (PIR) struggled going into 2020 as it look to close half its stores. It ended up filing in February, unable to find any interested buyers to keep the brand alive and ultimately started a liquidation process.


January 2020

Filing date Name Industry
1/28/20 Helios and Matheson Analytics Inc (HMNY) Software & Services
1/27/20 BL Restaurants Holding, LLC Food & Restaurants
1/27/20 Lucky’s Market Parent Company, LLC Food & Restaurants
1/27/20 Southland Royalty Company LLC Oil & Gas — E&P
1/24/20 High Mesa, In Oil & Gas — E&P
1/23/20 Fairway Group Holdings Corp. (FWMHQ) Food & Restaurants
1/21/20 McDermott International, Inc. (MDRIQ) Oil & Gas Services
1/6/20 Paddock Enterprises, LLC Consumer Products
1/5/20 Borden Dairy Company Food & Restaurants

 

Helios and Matheson Analytics (HMNY) the owner of MoviePass filed for bankruptcy protection in January due to heavy losses from its subscription-based movie business.

 


Conclusion

2020 has been a year marked by uncertainty. It has seen a worldwide pandemic, the collapse of oil prices (crude front month futures temporarily traded in negative territory at one point) and what many are labeling “Retail Mania” as risk assets have soared after March’s sell-off.

But added volatility pushed many distressed companies further to the brink of bankruptcy.

 

 


I am Rich, the co-founder of Koyfin. As a former distressed high-yield trader now designer/developer, I wanted to share some thoughts and observations I see in the distressed high-yield corporate bond market. During my trading days, I shared a daily distressed digest with clients containing trading color and news. Now, I hope to share them with you. Feel free to follow me on Twitter @koyfinTrader as well as share any feedback. My DMs are always open.