AMC notes under pressure; PBF dips on sell-off as oil rallies; TPC slides; Wesco down

By Cristal Cody

Tupelo, Miss., Feb. 3 – AMC Entertainment Holdings, Inc.’s existing paper shed a few points in strong trading action over Thursday’s session while its new issue also traded lower.

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) fell 2 7/8 points after softening 1/8 point the previous day.

The theater owner’s new 7½% first-lien notes due 2029 (Caa1/B-) stayed below par in the secondary market.

“The market was heavy from the get-go and certainly the Nasdaq got pounded,” a source noted. “This is considered one of those meme stock-type names and is probably trading above value. I would’ve thought it would’ve gone lower, but that’s a big coupon.”

Market tone declined with the Nasdaq off as much as 3.74% by the close and measured volatility up over 10%.

The Chicago Board Options Exchange’s CBOE Volatility index was 10.23% higher by late afternoon at 24.35.

The iShares iBoxx High Yield Corporate Bond ETF slipped 76 cents, or 0.9%, to end at $84.10.

Oil prices rallied, hitting over $90 a barrel.

West Texas Intermediate crude oil benchmark futures for March deliveries settled up $2.01 to $90.26 a barrel.

“All of the energy names have held in pretty well and are trading solidly on the heels of the move in oil,” a source said.

PBF Energy Inc.’s 7¼% senior notes due 2025 (Caa1/B/B-) were quoted trading at 82, 82½ by the end of the session.

The Parsippany, N.J.-based petroleum refiner’s issue is down slightly after gaining about 1¾ points to 83 bid on Wednesday.

“It was high as 83ish today, but it was up a couple points over the last several days,” a source said. “It’s off maybe a little bit with this sell-off this afternoon, but a pretty solid performance.”

Meanwhile Thursday, TPC Group Inc.’s 10½% senior secured notes due 2024 (Caa2/CCC-/B-) dropped about 10 points in thin trading after the company confirmed it missed approximately $53 million of interest payments on its secured notes.

Wesco Aircraft Holdings Inc.’s paper remained soft with the company’s 9% senior secured notes due 2026 (Caa3/CCC+) down about 1½ points.

AMC notes lower

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) declined 2 7/8 points to 93½ bid by the day’s end, market sources said.

The notes were 1/8 point softer on Wednesday at 96 3/8 bid after adding nearly 2¾ points on Tuesday.

AMC’s new 7½% first-lien notes due 2029 (Caa1/B-) also were lower at 99¼ bid, 99¾ offered.

“It never really traded above par,” a source said.

The issue saw “decent performance in line with the market,” the source said.

The company sold $950 million of the notes on Wednesday at par in a deal upsized from $500 million and priced at the tight end of the 7½% to 7¾% yield talk.

AMC’s 5¾% senior subordinated notes due 2025 (Ca/CCC-) were about ¼ point lower at the 77¾ bid area by the close.

The issue was up 3 5/8 points the previous day.

Moody’s upgraded the issuer and the company’s secured notes on Wednesday.

The Leawood, Kan.-based movie theater owner plans to redeem the $500 million outstanding of its 10½% senior secured first-lien notes due 2025 with proceeds from the new offering.

TPC paper weakens

TPC Group’s 10½% senior secured notes due 2024 (Caa2/D/CC) traded about 10 points weaker on Thursday at 60 bid, 62 offered in light trading, a source said.

“S&P has them in default,” the source noted.

The 10½% issue has softened about 30 points since November.

TPC said in a news release on Thursday that the company is in discussions with a group representing the bulk of noteholders regarding the missed payments that were due Tuesday on its 10½% first-priority lien notes and 10 7/8% first-priority lien notes due 2024.

TPC reported it signed a forbearance agreement with Ad Hoc Group Ltd. that will stave off a default if the 30-day grace period lapses without a payment.

The forbearance is initially good until March 18 and may be extended.

TPC said the Ad Hoc Group is providing it with $52 million of additional liquidity through a commitment to purchase additional senior secured priming notes due 2024.

The Houston-based chemical manufacturer was downgraded on Tuesday by Fitch Ratings and S&P Global Ratings.

S&P said the issuer is unlikely to make the payments during the grace period and considers the action tantamount to a default.

Wesco bonds soften

Wesco’s 9% senior secured notes due 2026 (Caa3/CCC+) fell about 1½ points to 83¼ bid by the market’s close on Thursday, a source said.

The notes were up 1 point in the prior session.

Wesco’s 8½% senior secured notes due 2024 (Caa3/CCC+) also were about ½ point softer at 84 bid on Thursday after declining over 1½ points the previous day.

The Fort Worth-based aerospace supplier sold the notes via Wolverine Escrow LLC.

Wesco, acquired in 2020 by an affiliate of investment firm Platinum Equity and combined with U.K.-based aerospace and defense industry supplier Pattonair Ltd., is now doing business as Incora.

Distressed returns higher

Distressed returns remained positive through mid-week, according to the latest market data.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return was 0.61% on Wednesday, compared to 0.5% on Tuesday and 0.66% on Monday.

Month-to-date total returns climbed to 1.11% on Wednesday from 0.5% in the first session of February.

Year-to-date returns were better at minus 0.43% versus minus 1.03% on Tuesday and minus 1.53% on Monday.

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