AMC notes decline; Embarq paper softens; Carnival bonds improve, CDS spreads widen

By Cristal Cody

Tupelo, Miss., Oct. 14 – Secondary action thinned on Friday with a few names more active in the distressed bond market.

AMC Entertainment Holdings, Inc.’s and Embarq Corp.’s paper saw some of the day’s heaviest distressed secondary interest.

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) were down 3 points following a new bond deal from the company.

The issue has dropped more than 8 points over the back half of the week.

Embarq gave back 1¼ points over the day.

Market tone overall was soft on Friday with a focus on a deluge of earnings results following weak September inflation data results in the prior session.

Stock indices all moved lower with the S&P 500 ending off 2.37%.

The iShares iBoxx High Yield Corporate Bond ETF fell 23 cents, or 0.32%, to $71.51.

Market volatility was marginally higher with the CBOE Volatility index up ¼% at 32.02.

Trading was mostly light in the distressed space.

Carnival Corp.’s 10½% senior notes due 2030 (B3/B) were among the day’s active issues and rose about 1¼ points on more than $15.5 million of paper traded.

The company’s credit default swap spreads eased more than 300 basis points this week.

AMC notes lower

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) went out Friday down 3 points at 56 bid on $13 million of secondary action, a source said.

The bonds gave back 1½ points on Thursday and fell more than 4 points on Wednesday after an AMC subsidiary started marketing $400 million of new five-year senior secured notes.

AMC and indirect subsidiary Odeon Finco plc priced the issue on Friday with a yield of 15.066%.

The Leawood, Kan.-based movie theater owner and gold and silver mine investor’s common stock closed off less than 1% at $6.

Embarq remains soft

Embarq’s 7.995% notes due 2036 (Caa2/CCC/CCC) traded down about 1¼ points on Friday to 42¾ bid in active trading totaling more than $14.5 million, a source said.

The bonds gave back about 2¼ points on Thursday.

Embarq 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, Inc. by Connect Holding II LLC, doing business as Brightspeed.

Embarq’s CDS spreads widened more than 90 bps over the past week ended Wednesday, while Lumen’s CDS spreads eased nearly 75 bps, according to a Moody’s Investors Service report.

Carnival paper up

Also Friday, Carnival’s 10½% senior notes due 2030 (B3/B) rose about 1¼ points to 73½ bid on more than $15.5 million of paper traded, a source said.

Meanwhile, the cruise line’s CDS spreads eased 340 bps to 1,993 bps for the past week ended Wednesday, according to a Moody’s report.

Distressed index lower

S&P U.S. High Yield Corporate Distressed Bond index one-day returns remained soft on Thursday at minus 0.5%, compared to minus 0.28% on Wednesday and minus 0.93% at the start of the short holiday week.

Month-to-date total returns were lower at minus 0.89%, compared to minus 0.4% on Wednesday and minus 0.12% on Tuesday.

Year-to-date total returns fell to minus 26.87% from minus 26.51% on Wednesday and minus 26.3% on Tuesday.

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