Endo lower; Mallinckrodt flat; Air Methods gains; AMC soft; 99 Cents off; PBF drops

By Cristal Cody

Tupelo, Miss., Dec. 14 – Endo International plc’s junk bonds slipped on Tuesday after Texas’ attorney general announced an investigation into a subsidiarity and investment-grade rated AbbVie Inc. (Baa2/BBB+) for deceptive trade practices.

Endo’s 6% senior notes due 2028 (Caa3/CCC-) dropped over 2½ points.

Mallinckrodt plc’s notes were mostly unchanged.

Air Methods Corp.’s 8% senior notes due 2025 (Caa3/CCC) rallied over 2 points after declining over 1 point in the prior day.

In other distressed paper, AMC Entertainment Holdings, Inc.’s bonds extended declines on Tuesday, going out about ½ point to over 1 point weaker.

99 Cents Only Stores LLC’s 7½% senior secured notes due 2026 (Caa2/B-) dropped nearly 4 points following a downgrade from Moody’s Investors Service.

Market tone was soft as the Federal Reserve kicked off a two-day policy meeting on Tuesday with equities and oil prices lower a second day.

The iShares iBoxx High Yield Corporate Bond ETF declined 15 cents to $86.48 after ending Monday unchanged.

West Texas Intermediate crude oil benchmark futures for January deliveries settled 56 cents lower at $70.73 a barrel.

In distressed energy issues, PBF Energy Inc.’s 6% senior notes due 2028 (Caa1/B/B+) fell about 1½ points after trading nearly 1 point lower on Monday.

Plains All American Pipeline, LP’s 6 1/8% series B fixed-to-floating rate cumulative redeemable perpetual preferred units (Ba3/BB/BB) gained 1 point on over $3.5 million of secondary activity, a source said.

The Houston-based natural gas and crude oil transporter’s issue was quoted at 84¾ bid.

Endo declines

Endo Finance LLC’s 6% senior notes due 2028 (Caa3/CCC-) dropped over 2½ points to under 74½ bid on $9.7 million of volume on Tuesday, a source said.

The notes were about ¼ point softer on Monday.

Texas attorney general Ken Paxton said in a news release on Monday that he is investigating Endo Pharmaceuticals, Inc. and AbbVie over the advertisement and promotion of hormone puberty blockers for unapproved uses without disclosing potential risks to children and their parents.

Endo’s bonds have improved about 10½ points since August.

The pharmaceutical maker announced in September that the company and its subsidiaries reached agreements to settle opioid-related lawsuits in Louisiana and New York, following a $35 million settlement in Tennessee announced in July.

The Dublin-based company’s bonds rallied in November after a California verdict that its subsidiaries are not liable for opioid-related claims in the state.

Mallinckrodt steady

In other opioid names, Mallinckrodt’s bonds were mostly unchanged on Tuesday, according to a market source.

Mallinckrodt’s 5¾% senior notes due 2022 went out flat at 56 bid.

The issue was about 1½ points weaker so far in December.

The Dublin- and St. Louis-based pharmaceutical company is underway in a Chapter 11 bankruptcy process after filing on Oct. 12, 2020 in the U.S. Bankruptcy Court for the District of Delaware.

Mallinckrodt received a court order in November that extended the reorganization plan filing period through March 8 and the solicitation period through May 10.

Air Methods up

Air Methods’ 8% senior notes due 2025 (Caa3/CCC) traded over 2 points higher on Tuesday at 85 bid after dropping over 1 point in the previous session, a source said.

The notes improved on $1 million of secondary supply over the day.

The bonds from parent New York-based ambulance service provider ASP AMC Holdings Inc. traded at 94½ bid in October.

AMC paper slips

AMC Entertainment’s bonds remained soft on Tuesday after declining about ¼ point to 1 point on Monday following regulatory disclosures that company insiders sold $10 million of shares, a source said.

AMC’s 5¾% senior subordinated notes due 2025 (Ca/CCC-) dipped about ½ point to under 78 bid.

AMC’s 12% second-lien senior secured notes due 2026 (Ca/CCC-) declined 1 1/8 points to 101 3/8 bid during the session.

The Leawood, Kan.-based movie theater owner’s stock recovered $1.26, or 5.42%, to close at $24.50 after declining $4.20, or 15.31%, on Monday.

According to filings with the Securities and Exchange Commission, on Dec. 7, chief executive officer Adam Aron sold $9.65 million of stock, while chief financial officer Sean Goodman sold over $565,000 of class A common shares.

99 cents down

99 Cents Only Stores’ 7½% senior secured notes due 2026 (Caa2/B-) reacted after a downgrade from Moody’s, going out nearly 4 points weaker at the 85 bid area on $3.5 million of volume, a source said.

Moody’s downgraded the Commerce, Calif.-based discount retailer and its notes to Caa2 from Caa1 on Tuesday, citing a weaker-than-expected operating performance.

PBF notes decline

PBF Energy’s 6% senior notes due 2028 (Caa1/B/B+) traded about 1½ points weaker at 62½ bid in light supply over the day, a source said.

The issue dropped about 1 point on Monday.

The Parsippany, N.J.-based petroleum refiner’s notes have improved about 2½ points since November.

Distressed index

Distressed index daily returns were positive at the start of the week.

The S&P U.S. High Yield Corporate Distressed Bond index posted a one-day total return of 0.02%.

Month-to-date returns were 1.59% on Monday, while quarterly returns hit minus 5%.

Year-to-date total returns were 23.71% in the prior session.

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