AMC notes better; Embarq climbs; CHS steady ahead of aftermarket post of heavy loss

By Cristal Cody

Tupelo, Miss., Oct. 26 – A few distressed bond names saw strong trading action in the secondary market on Wednesday.

AMC Entertainment Holdings, Inc.’s 7½% notes due 2029 (Caa1/B-) traded nearly 1½ points better on volume of more than $24 million.

Embarq Corp.’s 7.995% notes due 2036 (Caa2/CCC/CCC) continued to climb higher on strong trading volume on Wednesday.

The bonds went out the door up 4¼ points after trading more than 2 points higher on Tuesday.

Overall distressed trading was lighter with trading heavier in higher-rated junk issues, according to a market source.

Market volatility slowed over the session. The CBOE Volatility index fell 4.15% to 27.28.

Stock indices were mixed on the day. The Nasdaq gave back 2.04%.

The iShares iBoxx High Yield Corporate Bond ETF was up 20 cents, or 0.27%, at $73.44.

CHS/Community Health Systems, Inc.’s 5 5/8% senior secured notes due 2027 (B2/B/BB-) went out mostly flat ahead of the release of the company’s third-quarter report after the markets closed on Wednesday.

CHS reported steep losses for the quarter ended Sept. 30.

AMC trades higher

AMC’s 7½% notes due 2029 (Caa1/B-) saw heavy secondary interest during the session with the bonds quoted nearly 1½ points higher and better than 68½ bid, a source said.

Secondary supply totaled more than $24 million.

The issue was more than ½ point better from trading Friday around 68 bid.

AMC sold $950 million of the first-lien notes back on Feb. 2, 2022 at par.

The Leawood, Kan.-based movie theater owner and gold and silver mine investor priced a new junk bond earlier in October.

Embarq bonds up

Embarq’s 7.995% notes due 2036 (Caa2/CCC/CCC) traded 4¼ points better going out the door at 41¼ bid on Wednesday, a source reported.

Trading was active on $11.5 million of supply.

The notes have climbed more than 5 points week to date.

Connect Holding II LLC, doing business as Brightspeed, earlier in the month closed on its acquisition of the Overland Park, Kan.-based telecommunications company from Lumen Technologies, Inc.

CHS notes mostly flat

CHS/Community Health Systems’ 5 5/8% senior secured notes due 2027 (B2/B/BB-) went out Wednesday mostly flat ahead of the release of the company’s third-quarter results, a source said.

The bonds traded as much as 5/8 point lower before bumping up to go out mostly unchanged from Tuesday at the 70¼ bid area.

The Franklin, Tenn.-based operator of acute care and outpatient facilities reported after the market close on Wednesday that profit sank in the third quarter to a loss of $42 million, or 32 cents a share, from income of $111 million, or 85 cents a share, in the same period in 2021.

Operating revenue for the quarter ended Sept. 30 fell 2.9% to $3.03 billion.

Distressed returns gain

S&P U.S. High Yield Corporate Distressed Bond index one-day returns edged up on Tuesday to 0.18% from 0.01%.

Month-to-date total returns rose to minus 1.2% versus minus 1.38% on Monday.

Year-to-date total returns improved to minus 27.1% on Tuesday from minus 27.23% on Monday.

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