AMC notes gain as more theaters reopen; American Airlines notes on the move in secondary

By James McCandless

San Antonio, Sept. 3 – The distressed debt market’s attention toward entertainment and travel names carried over from the previous day.

AMC Entertainment Holdings, Inc.’s notes continued to gain ground as it reopens a large portion of its movie theaters.

Meanwhile, in the travel space, American Airlines Group Inc.’s issues varied in direction as the market saw optimism for the industry.

Sector peer United Airlines Holdings, Inc.’s paper also diverged.

While oil futures marked the day with losses, Transocean Ltd.’s notes followed, Occidental Petroleum Corp.’s issues closed mixed and Antero Resources Corp.’s paper pushed upward.

In the telecom space, Intelsat SA’s notes trailed in the wake of the company’s news about an acquisition.

Wireline services name Frontier Communications Corp.’s issues ended in a higher position.

Elsewhere, manufacturer Bombardier Inc.’s paper saw a drop.

AMC gains

AMC’s notes gained ground, continuing a positive run, traders said.

The 12% notes due 2026 reached up 1¼ points to close at 40¾ bid. The 10½% notes due 2025 improved by 1¼ points to close at 92 bid.

About $17 million of the 2026 notes were on the tape by the end of the session.

Thursday marked the ninth straight day of gains for the 2025 notes.

The company’s structure continues to receive heightened attention this week after the theater operator announced that it would reopen 70% of its movie theaters by Thursday.

The push involves 140 locations across the country.

“I think the alternative of just remaining closed and taking out loans was just not feasible,” a trader said. “So, it’s a cautious optimism that they can get some cash coming in and not have to close again.”

AMC was forced to shutter its chain of theaters after the onset of the coronavirus pandemic to meet government stay-at-home mandates.

Airlines in focus

Meanwhile, in the travel space, American Airlines’ issues varied in direction, market sources said.

The 5% senior notes due 2022 shed 2 points to close at 65¾ bid. The 11¾ senior notes due 2025 rose 1¾ points to close at 99½ bid.

The market saw optimism in the Fort Worth-based airline and others in the sector as data from U.S. travel authorities continues to show slow growth in travel.

Last week, the Transportation Security Administration screenings reached 807,000.

“The market is looking for any scrap of positive news,” a trader said.

Despite the climb, the company has warned that as many as 40,000 people could see layoffs or furloughs if the federal government does not pass a second round of payroll aid.

Of those, 19,000 of those jobs could be involuntary layoffs.

The government passed $25 billion in aid in March, but a second round of federal aid is stalled in Congress.

Chicago-based sector peer United Airlines’ paper was flat to higher.

The 5% senior notes due 2024 tacked on ½ point to close at 91 bid. The 4¼% senior notes due 2022 held level at 94 bid.

Oil names active

While oil futures marked the day with losses, distressed energy tranches moved on separate paths, traders said.

West Texas Intermediate crude oil futures for October delivery shaved off 14 cents to cap the day at $41.37 per barrel.

North Sea Brent crude oil futures for November delivery finished at $44.07 per barrel after a 36 cent dip.

Steinhausen, Switzerland-based contract driller Transocean’s notes followed the direction of futures.

The 7½% senior notes due 2031 gave up ¾ point to close at 19½ bid. The 6½% senior notes due 2020 fell 1½ points to close at 84¾ bid.

Houston-based independent oil and gas producer Occidental Petroleum’s issues closed with mixed results.

The 2.9% senior notes due 2024 were docked 1 point to close at 91¾ bid. The 2.7% senior notes due 2022 garnered ¼ point to close at 99 bid.

Denver-based producer Antero Resources’ paper pushed upward.

The 5 1/8% senior notes due 2022 tacked on ¾ point to close at 86¼ bid. The 5% senior paper due 2025 rose 1 point to close at 69½ bid.

Intelsat trades lower

In the telecom space, Intelsat’s notes trailed through the session, market sources said.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes 2023 dropped 1¾ points to close at 4 bid.

This week, news broke that the Luxembourg-based satellite operator plans to draw down on its $1 billion in debtor-in-possession financing to finance the acquisition of Gogo Inc.’s commercial aviation business for $400 million.

Stakeholders and the bankruptcy court have approved the acquisition, which is expected to close before the end of first-quarter 2021.

The Norwalk, Conn.-based wireline services company’s 11% senior notes due 2025 added ½ point to close at 43½ bid.

Bombardier drops

Elsewhere, manufacturer Bombardier’s paper saw a drop, traders said.

The 7½% senior paper due 2025 slipped 1¼ points to close at 73 bid. The 8¾% senior paper due 2021 fell ½ point to close at 95 bid.

Recently, the Montreal-based air and rail products builder announced layoffs in its Canadian and European facilities.

In the coming months through 2021, the company will lay off 200 employees in its Ontario plant.

Bombardier has also said it may lay off a portion of its workforce in the United Kingdom.

© 2015 Prospect News.
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