Ukraine ag bonds plunge; Transocean softens; Envision Healthcare recovers; AMC declines

By Cristal Cody

Tupelo, Miss., Feb. 24 – Bonds softened in heavy selling as Russia’s attack on Ukraine rattled investors on Thursday.

“It was kind of a kneejerk reaction lower and wider,” a market source said. “Everything traded off 1 to 2 points out of the chute. Even energy was off, despite that oil rallied, but it’s all kind of pulled back at the end of the day.”

Stocks recovered by the day’s close with the Nasdaq climbing 3.34%.

The iShares iBoxx High Yield Corporate Bond ETF finished up 59 cents to $83.14.

Market volatility was down 3.32% but remained high with the Chicago Board Options Exchange’s CBOE Volatility index, also known as the ‘Fear Factor’ index, at 29.99 by the end of the session.

Bonds from Ukraine’s corporate issuers rushed into the distressed space on Wednesday and continued to free-fall on Thursday in light trading, according to market sources.

Kyiv, Ukraine-based poultry and grain producer MHP SE’s 6.95% senior notes due 2026 (B/B+) plunged 33¼ points to 38 bid by the close.

Kernel Holding SA’s paper continued to sink with the Ukrainian agricultural commodities company’s 6½% senior notes due 2024 (/B+/BB-) headed out down 33½ points at 45 bid.

The issue was quoted trading off 9½ points at 75 bid in the prior session.

Energy bonds were lower on the day as oil gained.

North Sea Brent crude oil futures for April deliveries jumped $2.24 to settle at $99.08 a barrel.

Transocean Inc.’s bonds fell about ¼ point to 1¼ points in thin trading.

AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) dropped 1 7/8 points during the session.

Among the few distressed issuers trading higher on Thursday, Envision Healthcare Corp.’s 8¾% senior notes due 2026 (Ca/CC) reversed the previous day’s losses with the issue up 4 points over the day.

“There were very few names that were unchanged – even more Treasury-sensitive, very strong BB-type names were lower,” a source noted.

Transocean declines

Transocean’s 7¼% senior notes due 2025 (Ca/CCC+) declined about 1¼ points to the 77½ bid area in thin secondary action on Thursday, a source said.

Transocean’s 7½% senior notes due 2031 (Ca/CCC) were quoted down about 1 point at the 61½ bid area.

The Vernier, Switzerland-based offshore driller’s 6.8% senior notes due 2038 (C/CCC) also were about ¼ point lower at the 57¾ bid area over the day.

AMC notes lower

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) fell 1 7/8 points to 89¾ bid in strong secondary supply totaling $21.25 million on Thursday, a market source said.

The notes have softened from trading at 94½ bid following a new bond offering earlier in the month.

The Leawood, Kan.-based movie theater owner sold $950 million of 7½% first-lien notes due 2029 on Feb. 2.

Envision notes higher

Envision Healthcare’s 8¾% senior notes due 2026 (Ca/CC) jumped 4 points to hit 50 bid on Thursday on $2 million of paper traded, a source said.

The company’s bonds were down about 2¾ points in the prior session.

The notes ended the previous week about 2¼ points softer.

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

Distressed index softens

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return declined to minus 0.56% on Wednesday from 0.03% on Tuesday.

Month-to-date total returns widened to minus 1.8% from minus 1.24% at the start of the holiday-shortened week.

Year-to-date index returns fell to minus 3.3% on Wednesday from minus 2.75% on Tuesday.

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