AMC bonds slide; National Cinemedia, Chesapeake Energy, distressed energy paper gains

By Cristal Cody

Tupelo, Miss., Feb. 2 – AMC Entertainment Holdings, Inc.’s bonds slid on Tuesday, reversing a weeklong rally.

The company’s 12% second-lien senior secured notes due 2026 (Ca/C) fell 9¾ points in heavy trading to 64¼ bid by late afternoon after trading 4½ points weaker at the start of the day, a market source reported.

The issue remains stronger than where it was quoted at the start of the year at 27 bid.

AMC’s 5¾% senior subordinated notes due 2025 (Ca/C) dropped more than 12 points to trade at 43 5/8 bid.

The company’s 10½% first-lien senior secured notes due 2025 (Caa2/CCC) also declined 2¼ points during the session. The notes were last seen late afternoon trading at 99½ bid, still better than where the issue started the year at 73½ bid.

The company’s bonds and stock rallied in volatile trading last week on reports of additional funding raised and assurances of no imminent bankruptcy plans.

AMC’s stock lost 41.2% on Tuesday.

National CineMedia rises

Meanwhile, Covid-19 impacted cinema advertising company National CineMedia, LLC’s 5¾% senior notes due 2026 (Caa3/CCC+) traded at 79 bid in heavy volume on Tuesday, about ½ point better from strong trading levels on Friday, a source said.

The company reported Tuesday that it has signed a long-term cinema advertising affiliate agreement with Harkins Theatres, rounding out its national theater network to now include the top five movie exhibitors in the United States.

Chesapeake Energy rallies

Chesapeake Energy Corp.’s bonds were flat to stronger on Tuesday as the company marketed a new offering, a source said.

The issuer’s 11% senior secured second-lien notes due 2025 improved early in the session, climbing to 34 7/8 bid from 31¼ bid on Monday before rallying to 42¾ bid by late afternoon.

The company’s 5¾% senior notes due 2023 rose about ¼ point to 5¾ bid over the day.

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

On Tuesday, the Oklahoma City-based energy company offered $1 billion of senior notes in two tranches that included $500 million of five-year notes and $500 million of eight-year notes.

Proceeds are set to be used for purposes that include funding distributions under the company’s bankruptcy reorganization plan and to pay costs related to its emergence from bankruptcy.

Energy paper improves

Market tone remained positive on Tuesday for a second day with major stock indices up more than 1%.

The iShares iBoxx High Yield Corporate Bond ETF closed 22 cents, or 0.26%, better at $87.14.

Oil futures also climbed higher over the day.

North Sea Brent crude oil futures for March deliveries rose $1.11 to settle at $57.46 a barrel on Tuesday after staying flat in the prior two sessions.

West Texas intermediate crude oil for March deliveries settled up $1.21 at $54.76 a barrel.

Distressed energy bonds were stronger after falling last week on a federal pause in new oil and natural gas leases on public lands and offshore waters, according to a market source.

Genesis Energy, LP’s 6½% senior notes due 2025 (B1/B+) rose 2¼ points to 95 bid on Tuesday.

Laredo Petroleum Inc.’s 9½% senior notes due 2025 (Caa1/B-) traded up more than 2 points at 90 bid.

DCP Midstream LP’s 7 3/8% fixed-to-floating rate perpetual preferred securities (B1/B+/BB-) improved 2 points on the day to 85 1/8 bid.

Callon Petroleum Co.’s 6¼% senior notes due 2023 (Caa2/D) also traded 2 points better at 76½ bid.

Frontier edges higher

In other bankrupt names active in the secondary market on Tuesday, Frontier Communications Corp.’s distressed paper was heavily traded, a source said.

The company’s 7 5/8% notes due 2024 were quoted at 52¼ bid, up about ¼ point from where the issue was last seen in the prior week.

Frontier announced in January that it received approval from the Federal Communications Commission for its Chapter 11 bankruptcy restructuring.

The U.S. Bankruptcy Court for the Southern District of New York confirmed the company’s plan of reorganization in August.

The company expects to emerge from bankruptcy early in 2021.

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