Hertz eyed on going-concern news; Cleveland-Cliffs notes trade up after earnings beat

By James McCandless

San Antonio, May 12 – Distressed debt trading focused on names with going-concern issues and earnings on Tuesday.

Hertz Global Holdings, Inc.’s notes varied after the company warned that there is doubt of its continuing as a going concern.

The 6¼% senior notes due 2022 gained 1½ points to close at 19 bid. The 6% senior notes due 2028 lost 3 points to close at 12 bid.

As part of its first-quarter earnings release late Monday, the Estero, Fla.-based car rental company reported that there is substantial doubt that it will be able to remain a going concern within a year, warning that it may not have enough liquidity to pay its lenders.

In its earnings report, the company showed a loss of $1.78 per share, worse than the $1.06 loss expected by analysts.

Concurrently, Hertz said that has cancelled 90% of its new car purchases for 2020 as travel has been significantly reduced by the coronavirus pandemic.

Meanwhile, mining name Cleveland-Cliffs Inc.’s issues perked up a day after releasing its first-quarter earnings report.

The 4 7/8% senior secured notes due 2024 rose 2¾ points to close at 89¼ bid. The 9 7/8% senior secured notes due 2025 tacked on ¼ point to close at 99¼ bid.

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