AMC bonds rally in heavy trading; NGL steadies; distressed Hertz, HighPoint paper gains

By Cristal Cody

Tupelo, Miss., Jan. 25 – AMC Entertainment Holdings, Inc.’s bonds rallied across the board on Monday in heavy secondary trading after the company put to bed any talk of bankruptcy.

The company’s 12% second-lien senior secured notes due 2026 (Ca/D) jumped 9½ points to 49½ bid and were among the top traded issues by volume, a source said. The notes went out Friday at 39½ bid.

AMC’s 5¾% senior subordinated notes due 2025 (Ca/C) added 7¼ points to trade at 33½ bid.

The company’s 10½% first-lien senior secured notes due 2026 (Caa2/CCC) rose 7 points to trade Monday at 92½ bid, while the 10½% first-lien senior secured notes due 2025 (Caa2/CCC) climbed 6½ points to 95½ bid.

The 2025 notes were last seen Friday at 89 bid and traded at 82½ bid on Tuesday.

On Monday, AMC announced that as of Dec. 14, the company has raised or signed commitment letters to receive $917 million of new equity and debt capital.

“This increased liquidity should allow the company to make it through this dark coronavirus-impacted winter,” the company said in a release.

Adam Aron, AMC chief executive officer and president, said AMC has secured more than $1 billion of cash between April and November and that over the past six weeks, the company raised the additional $917 million to bolster and solidify its liquidity and financial position.

“This means that any talk of an imminent bankruptcy for AMC is completely off the table,” Aron said in the statement.

The movie theater owner’s bonds traded higher last week after the company announced it issued $100 million of guaranteed first-lien secured notes due 2026 on Jan. 15.

On Thursday, S&P Global Ratings downgraded the issuer to SD from CC and its second-lien notes to D from C, viewing the new offering that featured a $100 million exchange of second-lien notes for common stock as distressed.

National CineMedia gains

Covid-19 impacted cinema advertising company National CineMedia, LLC’s 5¾% senior notes due 2026 (Caa3/CCC+) headed up 3 points on Monday to 76 bid, a source said.

The company reported earlier in January that it has partnered to sell media inventory to office and residential properties through elevator and large format displays.

Covid-19 affected car rental company Hertz Corp.’s 5½% notes due 2024 ticked up about ¼ point over the session to trade at 61¾ bid, a source said.

Hertz filed for Chapter 11 bankruptcy in May.

Last week, Hertz received bankruptcy court approval to dispose of at least 121,510 lease vehicles in a master lease agreement in exchange for paying noteholders $756 million in nine equal payments of $84 million, beginning in January and concluding in September.

NGL mostly unchanged

NGL Energy Partners LP’s 7½% senior notes due 2023 (Caa1/CCC+) were heavily traded on Monday but mostly unchanged from Friday at 92¾ bid following the company’s new bond offering, a source said.

On Thursday, the 7½% notes had climbed 11½ points to 93½ bid, up from 82 bid on Wednesday.

NGL Energy priced $2.05 billion of five-year first-lien senior secured notes at par to yield 7½% on Monday.

Energy bonds softened late last week after the Biden administration suspended new oil and gas drilling permits on federal land for two months.

The secretary of the U.S. Interior Department on Wednesday implemented a 60-day suspension on new oil and gas leasing and drilling permits for U.S. lands and waters.

The space was mixed on Monday.

Nabors Industries Ltd.’s bonds were seen about 1¼ points better bid over the day, a market source said.

The oil and gas drilling contractor’s 7½% senior notes due 2028 (Caa1/CCC-) rose 1¼ points to 79 bid.

Oil futures climbed higher after softening Friday.

North Sea Brent crude oil futures for March deliveries rose 47 cents to settle at $55.88 a barrel after declining 69 cents on Friday.

West Texas intermediate crude oil for March delivery settled up 50 cents to $52.77 a barrel after closing Friday down 86 cents a barrel.

Market tone was modestly better on Monday.

The iShares iBoxx High Yield Corporate Bond ETF, which fell 16 cents on Friday, finished Monday up 2 cents, or 0.2%, at $87.32.

The S&P U.S. High Yield Corporate Distressed Bond index saw negative returns on Friday and closed off 0.2%. The index has month- and year-to-date total returns of 7.36%.

HighPoint notes trade

Elsewhere in the energy space, the 7% senior notes due 2022 (C/C) from HighPoint Resources Corp. saw thin trading after the notes rose 1 point to 41 bid in heavy secondary supply on Friday, a source said.

The company’s 8¾% notes due 2025 (C/C) also were not active on Monday after heavy trading Friday at 40 bid.

The natural gas and oil exploration company’s bonds plunged into distressed territory last year as the pandemic took hold.

The 7% notes traded in the 91 range in February before sinking to 22 bid by July and the 18 area by November, Trace data shows. The bonds traded as high as 51 bid by mid-December.

HighPoint’s 8¾% notes fell from a 91 handle in early February to 25 bid by May and down to a 21 handle by October, according to Trace. By mid-December, the bonds had recovered to trade in the 43 range.

The company announced in November that it has agreed to merge with Bonanza Creek Energy, Inc. in a debt-for-equity exchange transaction valued at about $376 million.

Bonanza Creek is expected to issue common stock and up to $100 million of senior notes as part of the merger.

The companies plan to commence a registered exchange offer and consent solicitation and simultaneous solicitation of a pre-packaged plan of reorganization under Chapter 11 bankruptcy for the merger.

If the minimum participation condition on the exchange is not met, HighPoint intends to file for Chapter 11 bankruptcy to execute the pre-packaged plan and complete the merger.

HighPoint expects the transaction to close in the first quarter under the exchange offer and consent solicitation or no later than the second quarter under the pre-packaged plan.

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