AMC notes on mend; Endo paper mixed; Mallinckrodt slides 5 points; Talen Energy higher

By Cristal Cody

Tupelo, Miss., Dec. 21 – AMC Entertainment Holdings, Inc.’s notes continued to see strong distressed secondary trading on Tuesday but to the upside after declines Monday and over the prior week.

AMC’s 10% secured notes picked up 2¼ points on $12 million of supply after softening 1½ points on Monday.

Junk secondary volume was light headed into the year’s end with fewer distressed issuers seen, a market source said.

Endo International plc’s paper was flat to slightly better on Tuesday.

Mallinckrodt plc’s 5¾% senior notes due 2022 slid 5 points over the day.

Overall market tone reversed course on Tuesday with stock indices over 1.5% higher.

The iShares iBoxx High Yield Corporate Bond ETF jumped 46 cents to $86.68 by the close after declining 15 cents on Monday.

February oil prices recovered over $2 after ending Monday weaker.

West Texas Intermediate crude oil benchmark futures for February deliveries settled up $2.51 at $71.12 a barrel.

In the distressed energy space, Talen Energy Supply LLC’s notes improved about ¼ point to ½ point over the day after trading 2 points to over 2¾ points lower on Monday.

AMC notes better

AMC Entertainment’s 10% senior secured second-lien notes due 2026 (Ca/CCC-) traded 2¼ points higher on Tuesday at 95 1/8 bid on $12 million of secondary volume, a source said.

The notes fell 1½ points on $9.5 million of paper traded on Monday after shedding over 7 points in the prior week.

The Leawood, Kan.-based movie theater owner’s bonds were weaker in mid-December as the reopening space softened on the spread of the Omicron Covid-19 variant and following disclosures that company insiders sold $10 million of shares.

Endo bonds mixed

Endo’s Luxembourg Finance Co. I Sarl’s 6 1/8% senior secured notes due 2029 (B3/B-) edged up less than ¼ point to 97¾ bid on $8.4 million of secondary volume Tuesday, a source said.

The notes were priced at par in a $1.29 billion private offering on March 11, 2021.

Endo Finance LLC’s 6% senior notes due 2028 (Caa3/CCC-) were quiet during the session. The notes were last seen trading on Monday about ¼ point lower near the 73¼ bid area.

Endo’s bonds have been volatile in December on several announcements, including that a California trial court issued a final ruling that the company’s subsidiaries are not liable for opioid claims and a notice from Eagle Pharmaceuticals, Inc. that it received approval of a generic drug cleared by a court of infringement on Endo’s patents.

Also last week, the market was surprised by an announcement that a federal judge overturned a $4.5 billion settlement with the Sackler family on future opioid claims tied to Purdue Pharma LP.

Endo, a Dublin-based pharmaceutical maker, announced in September that it reached agreements to settle opioid-related lawsuits in Louisiana and New York, following a $35 million settlement in Tennessee announced in July.

Mallinckrodt declines

Mallinckrodt’s 5¾% senior notes due 2022 were quoted at 51 bid on Tuesday, down 5 points from where the notes were last seen trading a week ago, a source said.

The notes remain stronger than where the issue started the year at the 36¼ bid area.

The Dublin- and St. Louis-based pharmaceutical company also faces opioid-related lawsuits moving through the bankruptcy court.

Talen paper improves

Talen’s 6½% notes due 2025 (Caa1/CCC/B-) improved ½ point to 43½ bid during the session, a market source said.

The notes declined nearly 2 points on Monday.

Talen’s 10½% senior notes due 2026 (Caa1/CCC/B-) rose ¼ point to head out at 47 bid on Tuesday after softening 2 5/8 points on Monday.

Talen’s bonds dropped about 2 points to over 4 points in the previous week after the company closed on an upsized $848 million first-lien revolving credit facility due in 2024.

Fitch Ratings placed The Woodlands, Tex., and Allentown, Pa.-based company and its bonds on ratings watch negative, noting the facility will stabilize Talen’s liquidity profile but will adversely affect the ratings of its existing debt.

Distressed index lower

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

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return on Monday was minus 0.82%, compared to 0.02% on the same day a week ago.

Month-to-date returns were minus 0.47% on Monday, while year-to-date total returns were 21.2%.

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