AMC attracts heavy secondary interest; Bed Bath & Beyond, Community Health notes up

By Cristal Cody

Tupelo, Miss., Aug. 8 – AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) saw heavy trading on Monday that put it at the top most active junk and distressed names in the secondary market.

The notes went out flat after gains made Friday on the heels of the company’s upbeat second-quarter report and plans for a special dividend.

Bed, Bath & Beyond Inc.’s 5.165% senior notes due 2044 (Caa3/B) also were among the most active distressed issues seen over the session. The notes continued to gain on Monday, picking up 1¾ points after improving 1 3/8 points on Friday.

Market tone was mixed on Monday but mostly better on the day.

The iShares iBoxx High Yield Corporate Bond ETF fell 7 cents, or 0.09%, to $78.11.

The CBOE Volatility index edged up 0.14 point, or 0.66%, to 21.29.

In other distressed paper, Community Health Systems Inc.’s notes traded 2 points better.

In China’s distressed property developer space, Logan Group Co. Ltd.’s paper declined after the company reported Sunday that it will not make the interest payments on several dollar bonds.

The space has remained under pressure in 2022 following more than a dozen defaults in 2021 from China-based developers.

AMC bonds active

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) traded flat at 84¼ bid on Monday on $47 million of volume, a market source said.

The notes went out Friday more than 2 points better on the day on $28 million of secondary activity.

The Leawood, Kan.-based movie theater owner and gold and silver mine investor reported strong second-quarter financial results on Thursday, as well as plans for a special dividend of one AMC preferred equity unit for each share of AMC class A common stock.

Bed Bath & Beyond gains

Bed Bath & Beyond’s 5.165% senior notes due 2044 (Caa3/B-) rose 1¾ points to 19 bid by the close on Monday, a source said.

Trading was strong on $10 million of volume.

The bonds gained 1 3/8 points on Friday on $2 million of secondary activity.

The Union, N.J.-based home products retailer’s paper plunged in June following the company’s weak first-quarter earnings report and shake-up of senior management.

CHS notes up

CHS/Community Health Systems, Inc.’s notes were seen 2 points better in the secondary market on Monday, a source said.

CHS’ 6 7/8% senior secured second-lien notes due 2029 (Caa2/CCC/CCC) rose 2 points to 61 bid on $5 million of trading supply.

The company’s 6 1/8% senior secured notes due 2030 (Caa2/CCC/CCC) also traded 2 points better at 57 bid on $3 million of secondary volume.

In July, the Franklin, Tenn.-based operator of acute care and outpatient facilities reported heavy second-quarter losses.

Logan paper drops

Logan Group’s dollar notes were unchanged to lower over the session, a source said.

Logan’s 4.7% senior notes due 2026 (Caa3) traded at 9 bid, down from where the issue was last seen in July at the 13 bid range.

Logan reported in a regulatory filing on Sunday that it will suspend the interest payments due for its offshore dollar-denominated bonds, including the 4.7% notes, 4¼% senior notes due 2025, 4½% senior notes due 2028, 5¾% senior notes due 2025 and 6½% senior notes due 2023.

The Shenzhen, China-based property developer said it is seeking a more stable capital structure through a holistic management of the company's offshore debts and is in the process of conducting an in-depth evaluation and examination on offshore debt management options.

Distressed index positive

S&P U.S. High Yield Corporate Distressed Bond index total returns remained positive on Friday.

One-day returns were 0.21%, compared to 0.51% on Thursday, 0.26% on Wednesday, 0.12% on Tuesday and 0.19% at the start of the week.

Month-to-date total returns improved at the close of the first week to 1.3% on Friday from 1.08% on Thursday, 0.57% on Wednesday, 0.31% on Tuesday and 0.19% in the month’s first session.

Year-to-date total returns rose to minus 19.63% from minus 19.81% Thursday, minus 20.21% on Wednesday, minus 20.42% on Tuesday and minus 20.52% at the week’s start.

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