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Hertz Corp. is tapping the asset-backed securities market this week with its first full-term rental-car securitization since November 2019, part of its emergence from chapter 11 protection, Bloomberg News reported. Proceeds from its inaugural post-bankruptcy ABS will be used to finance the purchase of new vehicles to be leased to Hertz under a so-called master lease agreement. It will also be used to refinance both its original pre-bankruptcy legacy fleet-financing facility, as well as a $4 billion interim facility established last November with Athene USA Corp., an affiliate of Apollo Capital Management Inc., as a stepping stone toward an ABS transaction. The total $2.2 billion offering, composed of two bond series, is expected to meet strong demand from investors who have a renewed confidence in the rental-car sector as travel picks up post-pandemic. The deal will likely satisfy yield-hungry investors, market observers say, as risk premiums at price talk are relatively wide compared to other recent rental-car ABS from issuers such as Avis Budget Group Inc.

Pacific Theatres Exhibition Corp., the California theater chain that shut down because of the pandemic, said it filed for chapter 7 bankruptcy and plans to liquidate, a big loss for film fans on the movie industry’s home turf, Bloomberg News reported. The action Friday by the company, which also operates the ArcLight chain, follows an announcement in April that the company wouldn’t reopen after a yearlong closing caused by coronavirus restrictions. “Having taken steps to wind down the business, the company today is seeking protection under Chapter 7 of the Bankruptcy Code in order to liquidate its remaining assets for the benefit of its creditors,” a spokesman said in an emailed statement. There is still a chance some of the locations could reopen. AMC Entertainment Holdings Inc., the largest global movie chain, has held acquisition talks with Pacific, according to AMC Chief Executive Officer Adam Aron. Earlier this week, two of Pacific’s venues in Los Angeles appeared on AMC’s mobile app but then vanished. Neither company commented on whether they were merging.

Companies in certain industries received more auditor warnings about their ability to stay afloat over the past year, compared with the previous period, as the coronavirus pandemic put finance chiefs and balance sheets under pressure, the Wall Street Journal reported. These warnings, also called going-concern opinions, are published in the annual reports of public companies and refer to their likelihood to remain in business for the next 12 months. Executives in the spring of 2020 rushed to preserve liquidity, often by slashing jobs, cutting costs, and halting dividends and share repurchases. Some industries — such as e-commerce, technology and food retail — managed to navigate lockdown orders and restrictions, while others, including airlines and oil companies, suffered big losses. Recurring losses, alongside issues such as negative cash flow and inability to pay suppliers, usually trigger going-concern opinions. Rental-car company Hertz Global Holdings Inc., restaurant and entertainment firm Dave & Buster’s Entertainment Inc. and cruise operator Norwegian Cruise Line Holdings Ltd. were among the companies that issued such notices last year. Hertz filed for bankruptcy about two weeks after disclosing a warning, but Dave & Buster’s and Norwegian didn’t. Truck startup Lordstown Motors Corp. earlier this month said it might not have enough cash to start production, which triggered a management reshuffle. Even though going-concern filings at U.S. public companies overall declined during the 12 months ended May 31, they rose in certain industries, such as real estate and transportation.

American Airlines said yesterday that it would cancel around 1% of its flights in July to serve a surprise uptick in travel demand at a time when the airline struggles with unprecedented weather and a labor shortage at some of its hubs, Reuters reported. American Airlines said that the move would bring additional resilience and certainty to its summer operations. "(We) feel these schedule adjustments will help ensure we can take good care of our customers and team members and minimize surprises at the airport," the company said in a statement. The airline said that its cancellations were targeted at impacting the smallest number of customers "by adjusting flights in markets where we have multiple options for re-accommodation."

In the turbocharged housing market, prices are surging and homes on the market are routinely selling for far more than the listing price. Those who can’t afford big down payments are often the ones losing out, the Wall Street Journal reported. Half of existing-home buyers in April who used mortgages put at least 20% down, according to a National Association of Realtors survey. In 10 years of record-keeping, that percentage has hit or exceeded 50% three times, and all have been since last fall. A quarter of existing-home buyers in April paid cash, the highest level since 2017, NAR said. Home prices are surging. The median existing-home price rose 19% from a year earlier to $341,600 in April, a record high, according to NAR. That is largely because there aren’t enough homes on the market to meet demand. In such a housing market, sellers can often choose among multiple offers. Cash buyers have an advantage because they don’t need to secure mortgages, which can make the transaction go faster. Sellers sometimes worry that offers with smaller down payments are likelier to fall through during the loan-closing process, agents say.

As the national economy recovers from the pandemic and begins to take off, New York City is lagging, with changing patterns of work and travel threatening the engines that have long powered its jobs and prosperity, the New York Times reported. New York has suffered deeper job losses as a share of its work force than any other big American city. And while the country has regained two-thirds of the positions it lost after the coronavirus arrived, New York has recouped fewer than half, leaving a deficit of more than 500,000 jobs. New York City lost the greatest share of jobs among the 20 largest U.S. cities. The city had an 11.8 percent decline in jobs from February 2020 to April 2021, almost three times the loss on the national level.

CWT, one of the world’s largest business travel managers, skipped a debt payment as it begins negotiating with creditors, Bloomberg News reported. The privately-held company, which was known as Carlson Wagonlit Travel prior to a 2019 rebrand, told its investors on Wednesday that it didn’t pay interest on its $250 million third-lien notes due 2026. The bonds pay 9.5% cash and 2% in-kind. The missed coupon payment, which was due June 15, starts the clock on a 30-day grace period before a formal default. CWT is seeking to reach a deal with creditors to rework its debts in that time, the people said, though forbearance could be granted to allow talks to continue. CWT and its bond investors are discussing options including swapping debt for equity to help the company boost its liquidity as business travel begins to resume, the people said. Certain creditors have chosen to restrict their trading and begin formal talks with the company, while others are planning to sign non-disclosure agreements in the coming days, they added. Company's bonds slip back to trade at a discount
Representatives for CWT didn’t return messages seeking comment. Reorg previously reported that the company’s creditors were preparing for debt talks.

In the pandemic shutdown last year, three-quarters of the nation’s small employers turned to the Small Business Administration for help. The portfolio that includes loans issued or guaranteed by the federal agency swelled more than five times to nearly $900 billion, the Wall Street Journal. The extraordinary demand has overwhelmed the SBA, best known for guaranteeing loans to small businesses, and left many entrepreneurs in limbo as they seek to recover. Business owners complain of unprocessed aid applications, waiting hours on the phone with questions that go unanswered and technological glitches. Its inspector general warned of signs of rampant fraud. At the heart of many of the problems is the Office of Disaster Assistance, a little-known unit that issued nearly a quarter of the agency’s pandemic loan volume. In normal times, the office provides loans after floods and other natural disasters. Since March 2020, the office has issued roughly $211 billion in pandemic-related Economic Injury Disaster Loans, three times as much aid as in the previous 68 years combined. In total, the office has provided roughly 9.8 million loans and grants totaling more than $230 billion, SBA data show. These pandemic responsibilities would have challenged even the best-run government agency. The office’s difficulties were compounded by the types of management and technological weaknesses identified over the years by government watchdog agencies. Small firms accounted for 47% of the private sector workforce in 2017, the most recent data available, and after being disproportionately hit by the pandemic, they are lagging behind bigger companies as the economy reopens. Nearly one-third of small employers say it will take them more than six months to recover from the pandemic, according to a Census Bureau survey. The SBA was responsible for administering the Paycheck Protection Program, which used private lenders to originate forgivable federal loans to pandemic-hit small businesses. The program, while hitting bumps, received bipartisan praise for issuing $800 billion in loans. One problem was that the Trump administration gave priority to the PPP, to the detriment of the disaster office, said Sen. Ben Cardin (D., Md.), chairman of the Senate Committee on Small Business and Entrepreneurship. The disaster loan programs, he said, “suffered in the implementation speed, as well as the amount of resources small businesses should have been entitled to that they did not receive.”