AMC notes up in strong secondary activity; Envision rallies; TPC quiet; Transocean gains

By Cristal Cody

Tupelo, Miss., Feb. 1 – Traders sent AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Ca/CCC-) up nearly 2¾ points in heavy trading volume on Tuesday after the theater owner reported strong fourth-quarter results.

In the distressed health care space, Envision Healthcare Corp.’s 8¾% senior notes due 2026 (Ca/CC) rallied 5¼ points.

TPC Group Inc.’s 10½% senior secured notes due 2024 (Caa2/D/CC) were quiet in the secondary market on Tuesday after downgrades from Fitch Ratings and S&P Global Ratings.

Risk-off tone was strong as volatility sank nearly 12%.

The Chicago Board Options Exchange’s CBOE Volatility index, which dropped 9.28% to below 30 on Friday, fell 9.76% on Monday and declined 11.56% more on Tuesday to 21.96.

The iShares iBoxx High Yield Corporate Bond ETF climbed 34 cents to close at $84.73.

Oil was unchanged to modestly higher.

West Texas Intermediate crude oil benchmark futures for March deliveries improved 5 cents to settle at $88.20 a barrel.

Transocean Inc.’s 7½% senior notes due 2026 (Ca/CCC) recovered over 2 points over the day after shedding more than 5 points in the previous week.

AMC bonds up

AMC’s 10% senior secured second-lien notes due 2026 (Ca/CCC-) jumped nearly 2¾ points to 96¼ bid on $39 million of paper traded on Tuesday, a source said.

The Leawood, Kan.-based movie theater owner reported preliminary fourth-quarter results on Tuesday in advance of potential investor meetings.

Preliminary fourth-quarter revenue was $1.17 billion, compared to $162.5 million in the year-ago quarter.

AMC’s chief executive officer announced at the start of January that the company is considering refinancing debt in 2022.

Envision notes climb

Looking at distressed health care paper, Envision Healthcare’s 8¾% senior notes due 2026 (Ca/CC) jumped 5¼ points to 57¼ bid by the close on Tuesday, a source said.

The notes saw $3 million of secondary volume.

Nashville-based Envision is a health care company and hospital-based physician group.

TPC secureds soft

TPC Group’s 10½% senior secured notes due 2024 (Caa2/D/CC) stayed quiet on Tuesday after declining about ¾ point to 66¾ bid in the prior session, a source said.

The issue has softened from the 91 bid range in November and the 72 bid area at the start of 2022.

On Tuesday, Fitch dropped the issuer rating on the Houston-based chemical manufacturer to CCC- from B- and lowered the rating on the 10½% secured notes to CC from B-.

Fitch said it believes TPC will enter restructuring negotiations with its lenders, noting the company has about $50 million due in February that is spread across its $930 million outstanding of 10½% first-priority lien notes and $153 million of outstanding 10 7/8% first-priority lien notes due 2024.

S&P, which dropped the issuer to D from CCC and lowered the ratings on the notes to D from CCC-, said TPC is unlikely to make the interest payments that were due Tuesday “or during the 30-day grace period” and considers the action tantamount to a default.

Transocean higher

Transocean’s 7½% senior notes due 2026 (Ca/CCC) traded over 2 points better at 77½ bid by the end of the session, a market source said.

The notes saw light supply totaling $1.7 million.

The Vernier, Switzerland-based offshore driller’s issue declined over 5 points in the prior week.

Distressed index positive

Distressed returns improved at the start of the week.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return rose to 0.66% on Monday versus minus 1.26% on Friday and minus 0.78% in the same session a week ago.

January ended with a month-to-date total return of minus 1.53%, compared to minus 2.18% on Friday and minus 1.13% in the week-ago session.

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