Kaisa bonds among most active distressed issues; Transocean softens; AMC higher

By Cristal Cody

Tupelo, Miss., Dec. 23 – Distressed bonds in China’s property developer space saw strong trading activity in the holiday-shortened session on Thursday.

Kaisa Group Holdings Ltd.’s paper was among the most active issues, a source said.

Kaisa announced on Monday that it defaulted on four bonds.

The space has seen numerous defaults late in the year from issuers including China Evergrande Group, Fantasia Holdings Group Co. Ltd., Sinic Holdings (Group) Co. Ltd., China Properties Group Ltd., Modern Land (China) Co. Ltd. and Sunshine 100 China Holdings Ltd.

Distressed secondary activity was light with the markets shutting early at 2 p.m. ET.

Overall market tone remained flat to positive with the Nasdaq up nearly 1%.

The iShares iBoxx High Yield Corporate Bond ETF was higher a third day, ending the session up 27 cents at $87.18.

February oil prices were stronger after climbing over $3 in the previous two sessions.

West Texas Intermediate crude oil benchmark futures for February deliveries rose 98 cents to $73.74 a barrel.

Transocean Inc.’s 7½% senior notes due 2031 (Ca/CCC) fell over ½ point on Thursday.

AMC Entertainment Holdings, Inc.’s notes saw a “little bounce back up” this week off the strong movie box office numbers for Spider-Man: No Way Home, a source said this week.

AMC’s 10% senior secured second-lien notes due 2026 (Ca/CCC-) were about ¼ point better in the short session and about 3 points better on the week.

AMC reported that 1.1 million people attended the Dec. 16 showing, ranking the movie as the theater owner’s highest opening night for a release in December.

The Spider-Man movie had a lot of “hype” and the strong attendance was “related to the movie itself and not the sentiment of people going back in theaters, so that should be interesting to see if other movies can keep up,” the market source said.

AMC’s theaters reopened in March after shuttering in 2020 due to the pandemic.

Cinema advertising operator National CineMedia, LLC’s unsecured notes also were over 1¼ points stronger on Thursday.

Kaisa notes active

Kaisa’s 11.95% senior notes due 2023 (C//C) were quoted at 26¾ bid on Thursday on $6 million of secondary volume, a source reported.

The company’s 10 7/8% senior notes due 2023 (C//C) saw trading totaling $4 million with the notes also moving at 26¾ bid, about 10 points lower from where the issue was last seen at the start of the month.

Kaisa said Monday it has not made the payments due on its 6½% notes due Dec. 7, 2021, 11.95% notes due 2023, 11.7% notes due 2025 and its 11.65% notes due 2026.

The Shenzhen, China-based real estate developer’s shares resumed trading on Monday on the Hong Kong Stock Exchange after trading was halted on Dec. 8.

AMC bonds better

AMC Entertainment’s 10% senior secured second-lien notes due 2026 (Ca/CCC-) climbed about ¼ point to 97 bid on Thursday for a third consecutive session of gains, a source said.

On Wednesday, the notes were at the 96, 96 7/8 range.

“Last week, they last traded around 93 7/8, so they’re definitely up based off of Spider-Man crushing the box office numbers,” a source said. “They were trading down just because of the Covid scares at the end of last week.”

AMC’s secured notes were quoted over 3 points higher from last week.

The Leawood, Kan.-based movie theater owner’s bonds remain down from the 102¾ bid levels seen earlier in the month.

National CineMedia up

National CineMedia’s 5¾% senior notes due 2026 (Caa3/CCC-) rose over 1¼ points on Thursday to 77½ bid on steady trading action, a source said.

The Centennial Colo.-based cinema advertising company’s secured notes saw secondary volume of $2.7 million in the short session.

Transocean lower

Transocean’s 7½% senior notes due 2031 (Ca/CCC) traded over ½ point weaker on Thursday at just under 58¼ bid, a source said.

Trading was active with $2 million of volume during the session.

The Vernier, Switzerland-based offshore driller’s issue has climbed over 10 points since the start of the year.

Distressed index positive

Distressed index daily returns remained positive on Wednesday, according to the latest data.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return was 0.37%, compared to 0.44% on Tuesday and minus 0.82% on Monday.

Month-to-date returns improved to 0.34% from minus 0.03% on Tuesday and minus 0.47% on Monday.

Quarterly returns remained soft at minus 6.17% on Wednesday.

Year-to-date total returns rose on Wednesday to 22.19% from 21.74% on Tuesday and 21.2% at the week’s start.

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