Distressed bonds mixed; AMC, Hertz improve; travel, retail, energy soft to start year

By Cristal Cody

Tupelo, Miss., Jan. 4 – While stocks had a bad day on the first trading session of the New Year, some distressed debt issuers saw inroads during the session.

Theater owner AMC Entertainment Holdings, Inc.’s bonds climbed in strong trading as 2021 kicked off, sources said.

AMC’s 10½% first-lien secured notes due 2026 (Caa2/CCC) were among the gainers on the day in distressed names.

The notes rose 7/8 point to 69 bid, a source said.

AMC’s 6 1/8% senior subordinated notes due 2027 (Ca/C) hit 15 bid, up ½ point.

Hertz Corp.’s notes were modestly better on Monday.

The car rental operator’s 6¼% senior notes due 2022 improved less than ½ point to 53.6 bid in strong trading.

Hertz’s 5½% senior notes due 2024 gained ¼ point from before Christmas to 53½ bid in thin trading over the day.

Offshore driller Transocean Ltd.’s 7½% senior notes due 2031 (C/CCC-) rose 1 point to 36¾ bid, a source said.

Meanwhile, the S&P U.S. High Yield Corporate Distressed Bond index ended December up 0.13% with a 10.7% month-to-date return and a 24.01% quarter total return. On Dec. 31, the index had a total return of minus 0.15%, shaving off the minus 3.09% year-to-date return last seen in mid-December.

American, United decline

Travel issuers remain pressured as the year opens with coronavirus counts growing and expectations the United States is months away from widespread vaccinations.

The airline industry is expected to receive a $15 billion boost to fund payrolls under the Covid-19 stimulus package president Donald Trump signed in December.

Bonds from American Airlines Group Inc. and United Airlines Holdings, Inc. mostly softened on Monday, sources said.

United Airlines Holdings’ paper traded heavily during the session.

The 4 7/8% senior notes due 2025 (Ba3/B/BB-) were among the day’s decliners, a source said. The notes fell 1½ points to 97¼ bid.

The Chicago-based airline company’s 5% senior notes due 2024 (Ba3/B/BB-) softened ½ point to 98 4/5 bid.

American Airlines’ 3¾% senior notes due 2025 (Caa1/CCC/CCC) slipped 1¼ points to 76¼ bid on Monday.

The Fort Worth-based air carrier’s 11¾% senior secured notes due July 15, 2025 gained nearly 3 points to 114 9/10 bid during the session.

Market soft over session

Market tone was weak on growing Covid-19 counts and ahead of Georgia’s race on Tuesday that will determine whether Republicans or Democrats control the U.S. Senate and Wednesday’s Congressional confirmation of the electorate votes certifying president elect-Joe Biden’s win.

England went into a virus-induced national lockdown that is expected to last well into February.

Equities declined more than 1% across the board during the session with the S&P 500 down 1.48% and the Nasdaq off 1.47% on the day.

The distressed space overall was mostly weak.

“The market was soft today,” a source said. “The HYG index was down.”

The iShares iBoxx High Yield Corporate Bond ETF declined 18 cents, or 0.21%, to 87.12 on Monday.

In the retail space, Macy’s Inc.’s 6.79% senior debentures due 2027 (B1/BB-) fell 3 points to 94 2/5 bid.

Distressed energy bonds also remained weak on Monday.

Peabody Energy Corp. saw its 6 3/8% senior secured notes due 2025 (Caa1/CCC-) trade 1½ points lower over the day to 54¾ bid, a source said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.