AMC paper continues streak; Hertz, Chesapeake Energy, Community Health notes gain

By Cristal Cody

Tupelo, Miss., Jan. 28 – AMC Entertainment Holdings, Inc.’s bonds continued pushing higher as trading supply remained heavy on Thursday.

The company’s 10½% first-lien senior secured notes due 2025 (Caa2/CCC) soared past par to trade at 101½ to 101¾ bid by mid-morning after rising 3½ points to 98 bid in the prior session, a source said.

The notes were last seen late afternoon at 101 bid.

The issue traded at the start of the year at 73½ bid.

AMC’s 5 7/8% senior subordinated notes due 2026 (Ca/C) on Thursday ticked up 4½ points to 50½ bid in heavy secondary trading, the market source said.

The issue traded Monday at 31¼ bid.

AMC’s bonds have rallied since the company announced additional funding, including $917 million of new equity and debt capita, and tabled any talk of an imminent bankruptcy.

The company’s stock dropped 56.63% to $8.63 on Thursday after catapulting 301.21% to $19.90 on Wednesday.

Oil futures decline

Market tone was mixed over the day with stocks moderately better.

The iShares iBoxx High Yield Corporate Bond ETF turned positive Thursday and closed up 26 cents, or 0.3%, to $87.20 after softening in the prior two sessions.

Oil futures weakened over Thursday’s session.

West Texas intermediate crude oil for March deliveries declined 51 cents to settle at $52.34 a barrel.

North Sea Brent crude oil futures for March deliveries fell 28 cents to $55.53 a barrel.

Distressed energy bonds were mixed as the Biden administration pauses new oil and natural gas leases on public lands or in offshore waters and considers adjusting royalties on extracted coal, oil and gas resources based on climate costs.

Coal producer Peabody Energy Corp.’s 6 3/8% senior secured notes due 2025 (Caa1/CCC-) declined to 56 7/8 bid in heavy secondary volume on Thursday, a market source said.

The bonds softened from 59¾ bid on Wednesday and 61½ bid on Tuesday.

Bankrupt names trade

In other distressed trading, Hertz Corp.’s 5½% notes due 2024 improved about ¾ point on Thursday to 63¼ bid, a source said.

The Covid-19 affected car rental company filed for Chapter 11 bankruptcy in May 2020.

Hertz received bankruptcy court approval last week 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.

Bankrupt Frontier Communications Corp.’s 7 5/8% notes due 2024 softened about 2 points in thin trading during the session from 52 bid on Wednesday, a source said.

Frontier expects to emerge from Chapter 11 bankruptcy early in 2021 after reporting this month that it received approval from the Federal Communications Commission for its restructuring.

In other bankrupt names trading, Chesapeake Energy Corp.’s bonds were flat to better on the day, according to a market source.

Chesapeake Energy’s 11½% senior secured second-lien notes due 2025 traded up to as high as 36¼ bid from 29 bid on Wednesday.

The company’s 5¾% senior notes due 2023 were quoted at 5 bid, improved from 4½ bid on Wednesday.

Chesapeake Energy’s plan to exit Chapter 11 bankruptcy was approved earlier in January.

Community Health better

Meanwhile, Community Health Systems Inc.’s 6 7/8% senior notes due 2028 (Ca/CCC-) continued to gain on the heels of the company’s second bond offering this month.

The issue was up about ¼ point in light trading at 91½ bid on Thursday, a source said.

The Franklin, Tenn.-based operator of acute care and outpatient facilities’ notes were quoted at the start of the year at 80¾ bid.

Subsidiary CHS/Community Health Systems Inc. priced $1.095 billion of 4¾% 10-year senior secured notes (Caa1/B-/B) on Tuesday, following the company’s sale of $1.775 billion of 6 7/8% junior-priority secured notes due 2029 (Caa3/CCC-/CC) on Jan. 19.

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