AMC extends gains; National CineMedia moves up; sell-off continues in China Evergrande bonds

By Cristal Cody

Tupelo, Miss., Sept. 14 – AMC Entertainment Holdings, Inc.’s secured and subordinated notes remained higher Tuesday after the paper rallied on Monday.

National CineMedia, LLC’s notes also improved nearly 1 point to 1 1/8 points on Tuesday after trading about 2½ points to over 2¾ points higher in the prior session.

National CineMedia “started moving up yesterday and continued today,” a source said. “There was continued strength in AMC and National CineMedia in the theater space.”

In other distressed issues, China Evergrande Group’s dollar bonds sold off Tuesday after the company announced it has hired financial advisers.

China Evergrande Group’s 11½% secured notes due 2023 (C/CCC-/CCC) dropped over 4¼ points by late afternoon.

Market action was busier at the start of the session.

“There were a lot of buyers in the morning and they disappeared in the afternoon,” a source said.

AMC bonds gain

AMC’s 12% second lien senior secured notes due 2026 (Ca/C) picked up ¼ point to over ½ point in heavy trading on Tuesday to head out at 95 1/8 bid, a source said.

The bonds added 2½ points to trade at 94½ bid on Monday.

AMC’s 5 7/8% senior subordinated notes due 2026 (Ca/CCC-) also were about 1 point better on the day at 73½ bid.

The Leawood, Kan.-based movie theater chain’s subordinated bonds climbed over 4¼ points Monday to the 72½ bid area.

CineMedia stronger

National CineMedia’s 5¾% senior notes due 2026 (Caa3/CCC+) traded Tuesday about 1 1/8 points better at 76 1/8 bid, a market source said.

The notes were more than 2¾ points higher on Monday at 75 bid.

The Centennial Colo.-based cinema advertising company’s 5 7/8% senior secured notes due 2028 (B3/CCC+) went out Tuesday at 89¼ bid, nearly 1 point higher from Monday and 3 points improved from Friday.

China Evergrande lower

China Evergrande Group’s 11½% secured notes due 2023 (C/CCC-/CCC) dropped over 4¼ points to 26 3/8 bid by late afternoon, a source said.

China Evergrande’s 10½% secured notes due 2024 slid about 3½ points to the 24½ bid range also.

The company’s notes softened about 7/8 point to 2 points in secondary trading on Monday.

The Shenzhen, Guangdong, China-based real estate developer’s bonds are down about 70 points since May.

China Evergrande said in a Hong Kong Stock Exchange filing on Tuesday that it has hired Houlihan Lokey (China) Ltd. and Admiralty Harbour Capital Ltd. as joint financial advisers to assess the company’s capital structure, evaluate its liquidity and explore options to ease its current liquidity problems.

The company is exploring selling parts of its interests in China Evergrande New Energy Vehicle Group Ltd. and Evergrande Property Services Group Ltd., as well as exploring options to dispose of its Hong Kong office building.

Distressed returns higher

Distressed index returns kicked the week off higher.

The S&P U.S. High Yield Corporate Distressed Bond Index total return improved to 0.43% on Monday from 0.06% on Friday.

Month-to-date total returns were 0.74% as of Monday, up from 0.31% on Friday.

Distressed year-to-date total returns climbed to 27.63% from 27.08% ahead of the weekend.

Market tone softened over Tuesday’s session.

The iShares iBoxx High Yield Corporate Bond ETF fell 4 cents to $88.01.

Crude oil prices edged up Tuesday. West Texas Intermediate crude oil benchmark futures for October deliveries added 1 cent to settle at $70.46 a barrel.

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