AMC notes higher; Transocean bonds up; Plains All American preferreds drop; Talen down

By Cristal Cody

Tupelo, Miss., Sept. 12 – Notes from AMC Entertainment Holdings, Inc., a movie theater chain that diversified itself in 2022 by acquiring a gold and silver mine stake, improved on Monday.

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) rallied 1¼ points as the theater space remains under pressure.

London-based movie theater chain Cineworld Group plc filed for Chapter 11 bankruptcy a week ago.

The September institutional leveraged loan default rate so far rose to 1½% from 1.3% in August following Cineworld’s Sept. 7 filing, according to a Fitch Ratings note released Monday.

Cineworld’s bankruptcy filing represents the largest default since iHeartCommunications in March 2018, according to Fitch.

“The filing is after $6 billion of defaults in August, the most volume registered in a month since October 2020,” Fitch said. “Health care/pharmaceutical accounted for the majority of August defaults. Endo International and Carestream Health filed for bankruptcy, and Envision Healthcare completed another distressed debt exchange.”

Year-to-date default volume is $21.7 billion, more than triple the amount at this time last year, said Fitch, which noted it still expects the 2022 default rate to end the year below 2%.

Market tone was strong over the session, tempering volatility with the primary market reopened in the junk space and stock indices higher. The Nasdaq climbed 1.27%.

The iShares iBoxx High Yield Corporate Bond ETF improved 21 cents, or 0.28%, to $76.02.

The CBOE Volatility index rose 5.35% over the day to 24.01.

Oil continued to gain.

West Texas Intermediate crude oil benchmark futures for October deliveries settled up 99 cents to $87.78 a barrel.

Overall distressed trading supply remained light.

Transocean Inc.’s 7½% senior notes due 2026 (Ca/CCC) picked up 2 points in thin secondary action.

Plains All American Pipeline, LP’s 6 1/8% series B fixed-to-floating rate cumulative redeemable perpetual preferred units (Ba2/BB/BB) dropped 1 7/8 points in one of the most active issues seen trading on Monday, according to a market source.

Bankrupt Talen Energy Supply LLC’s notes were soft on Monday but have climbed back to the high 80s and 90s range. The company’s 6½% senior notes due 2025 traded down 1½ points from Friday to 90 bid by the afternoon.

Talen’s 10½% senior notes due 2026 fell ½ point during the session.

AMC bonds gain

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) rallied 1¼ points to 82½ bid on $8 million of trading supply on Monday, sources said.

AMC’s 7½% first-lien notes due 2029 also improved more than 1¼ points to an 87 handle on $5 million of volume.

The Leawood, Kan.-based movie theater owner and gold and silver mine investor in August issued a special dividend of one AMC preferred equity unit for each share of AMC class A common stock.

AMC’s common stock closed Monday up 5.2% at $10.22.

Transocean improves

Transocean’s 7½% senior notes due 2026 (Ca/CCC) picked up 2 points in light trading totaling $1 million during the session, a source said.

The Vernier, Switzerland-based offshore driller’s issue was quoted at 81 bid.

Plains preferreds lower

Plains All American Pipeline’s 6 1/8% series B fixed-to-floating rate cumulative redeemable perpetual preferred units (Ba2/BB/BB) fell 1 7/8 points to head out Monday at 82¾ bid, a source said.

The Houston-based natural gas and crude oil transporter’s issue was active on $10 million of paper traded.

Talen notes dip

Meanwhile, Talen Energy’s paper on Monday gave back some gains made over the past month, a source said.

The 6½% senior notes due 2025 declined 1½ points to 90 bid by the afternoon.

Talen’s 10½% senior notes due 2026 (C) also dropped ½ point to 92½ bid by the close.

The notes traded with a 70s handle in early August.

Talen has submitted its bankruptcy plan of reorganization and disclosure statement with the U.S. Bankruptcy Court for the Southern District of Texas.

The Woodlands, Tex., and Allentown, Pa.-based power generation and infrastructure company filed for Chapter 11 bankruptcy in May.

Distressed returns up

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns finished Friday higher at 0.63%, compared to 0.31% on Thursday, 0.03% on Wednesday and 0.15% at the start of the previous short market week.

Quarter-to-date total returns on Friday were 2.04%.

Year-to-date total returns rose to minus 21.04% on Friday from minus 21.54% on Thursday, minus 21.79% on Wednesday and minus 21.81% on Tuesday.

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