AMC lower; Credit Suisse CDS spreads firm; Rite Aid lower for week; Embarq softens

By Cristal Cody

Tupelo, Miss., Oct. 13 – AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) gave back another 1½ points in strong trading action on Thursday after shedding more than 4 points on Wednesday.

Separately, Credit Suisse Group AG saw improvements in its credit default swap spreads this week, while its 7½% perpetual notes were trading about 2 points lower over the day.

Rite Aid Corp.’s bonds were more than 5 points lower on the week in distressed trading, while its CDS spreads widened another 120 bps this week after moving out nearly 800 bps in the previous week.

CDS spreads from Lumen Technologies, Inc. and just divested Embarq Corp. also widened this week, while Embarq’s paper declined about 2¼ points in light trading action on Thursday.

Stocks reversed early morning losses and closed up following the release of September inflation data with the S&P 500 index ending 2.6% higher and the Dow Jones industrial average 2.83% better.

The CBOE Volatility index dropped 4.86% to 31.94 by the close.

The iShares iBoxx High Yield Corporate Bond ETF added 16 cents, or 0.22%, to $71.74.

Distressed secondary trading in other paper stayed mostly light, according to market sources.

Bausch Health Cos. Inc.’s 9¼% senior notes due 2026 (Ca/CCC/CC) softened more than 3¾ points on $1 million of volume on Thursday.

AMC extends losses

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) fell 1½ points to head out at 59 bid on $27.5 million of paper traded on Thursday, a source said.

The bonds gave back more than 4 points on nearly $60 million of volume in Wednesday’s session after an AMC subsidiary started marketing a $400 million offering of new five-year senior secured notes.

AMC indirect subsidiary Odeon Finco plc is expected to price the issue on Friday.

Shares of AMC, the Leawood, Kan.-based movie theater owner and gold and silver mine investor, closed the day up 3¼% to $6.04.

Credit Suisse mixed

Credit Suisse’s 7½% perpetual notes were trading about 2 points lower in the 82 bid area in thin supply on Thursday, a market source said.

Meanwhile, Credit Suisse’s CDS spreads, which had widened 173 bps in the prior week, tightened 53 bps this week ended Wednesday to 382 bps, according to a Moody’s Investors Service report on Thursday.

Credit Suisse International last week announced a cash tender offer for up to $2 billion of notes from 12 tranches of securities, as well as a tender offer for up to €1 billion of euro and sterling notes.

The Zurich-based financial services company plans to release third-quarter earnings results on Oct. 27.

Rite Aid bonds eyed

Rite Aid’s bonds edged higher on Thursday but were trading more than 5 points lower on the week, while its CDS spreads also continued to widen, sources said.

The pharmacy chain’s 8% senior secured notes due 2026 (B3/CCC-/BB-) rose ¼ point to 62 7/8 bid following more than $4 million of paper traded over the day.

The notes were down 5 3/8 points since last week.

Rite Aid’s CDS spreads also widened another 120 bps this week after moving out 796 bps the previous week, according to a Moody’s report.

The Camp Hill, Pa.-based drug retailer’s CDS spreads eased to 3,256 bps for the past week ended Wednesday.

Embarq weakens

Embarq’s 7.995% notes due 2036 (Caa2/CCC/CCC) declined about 2¼ points to 42 1/8 bid in light trading action by late in the session on Thursday, a source said.

The company was downgraded on Wednesday by S&P Global Ratings following the completion of the Overland Park, Kan.-based telecommunications company’s acquisition from Lumen Technologies by Connect Holding II LLC, doing business as Brightspeed.

Embarq’s CDS spreads widened 92 bps to 909 bps for the past week ended Wednesday, while Lumen’s CDS spreads eased 74 bps to 730 bps over the week, a Moody’s report showed Thursday.

Bausch lower

In other distressed paper, Bausch’s 9¼% notes due 2026 (Ca/CCC/CC) softened more than 3¾ points to 55 bid in light trading action on Thursday, a source said.

The bonds saw $1 million of volume traded.

Bausch completed exchange offers for $5.59 billion of notes in September.

The Laval, Quebec-based pharmaceutical company plans to spin off unit Bausch + Lomb.

Distressed returns improve

S&P U.S. High Yield Corporate Distressed Bond index one-day returns improved on Wednesday to minus 0.28% from minus 0.93% on Tuesday at the start of the short holiday week.

Month-to-date total returns dropped to minus 0.4% on Wednesday versus minus 0.12% on Tuesday.

Year-to-date total returns also widened to minus 26.51% in the prior day from minus 26.3% in Tuesday’s session.

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