AMC higher; FLY Leasing paper rebounds; Community Health notes drop ahead of earnings

By Cristal Cody

Tupelo, Miss., Oct. 21 – AMC Entertainment Holdings, Inc.’s notes saw a small bounce back on Friday after sliding about 2¾ points to more than 6 points the previous day.

AMC’s 7½% notes due 2029 (Caa1/B-) recovered about 1½ points following a 2¾-point drop on Thursday.

Distressed paper from aircraft leasing company FLY Leasing Ltd. saw improvement on Friday with the 7% notes due 2024 (Caa2/D) trading 3½ points higher after a downgrade this week from S&P Global Ratings.

Financial markets were more upbeat over the day with stock indices all more than 2% higher.

The S&P 500 index closed up 2.37%, and the Nasdaq finished 2.31% higher.

The iShares iBoxx High Yield Corporate Bond ETF improved 69 cents, or 0.96%, to $72.49.

Market volatility was mostly flat. The CBOE Volatility index edged 0.07% lower to 29.96.

Meanwhile, Community Health Systems Inc.’s notes gave back about 2 points to more than 5 points in strong trading action totaling more than $32 million ahead of its third-quarter earnings release next week.

The 8% senior secured first-lien notes due 2026 (B2/B/BB-) declined 4¾ points by the close.

In other distressed market activity, Moody’s Investors Service said in a report that its “risk indicators are flashing higher default risks ahead.”

Moody’s said its B3 negative and lower list rose in the third quarter to 177 companies from 171 in the prior quarter.

The agency’s forecast calls for the U.S. speculative-grade default rate to rise to 4.8% a year from now, higher than the long-term average of 4.7%.

AMC trades up

AMC’s 7½% notes due 2029 (Caa1/B-) recovered about 1½ points on Friday in strong secondary supply totaling more than $21 million, a source said.

The notes were quoted trading around 68 bid by the close after shedding 2¾ points on Thursday on $16.75 million of supply.

AMC sold $950 million of the first-lien notes on Feb. 2, 2022 at par.

Secondary action in the Leawood, Kan.-based movie theater owner and gold and silver mine investor’s paper climbed on Thursday after AMC announced it closed on a new bond that priced last week.

FLY paper higher

FLY Leasing’s 7% notes due 2024 jumped 3½ points and went out late Friday at 77¾ bid, a source said.

Secondary supply was light on $2 million of volume.

On Wednesday, S&P dropped the issuer to SD from CCC- and the notes to D, reflecting the company’s below-par debt repurchases of the 7% notes.

S&P said FLY has repurchased $49.1 million of the $390.5 million outstanding principal and likely at prices representing about 55% to 75% of the principal value.

FLY Leasing announced in September it planned to repurchase up to $50 million of the 7% notes, or 12.8% of the aggregate issue.

The company also previously announced it entered into an equity line of credit agreement with its indirect parent entity, SASOF International Master Fund V LP, to issue common shares.

FLY Leasing is a global aircraft leasing company acquired by Miami-based Carlyle Aviation Partners in 2021.

CHS notes slip

CHS/Community Health Systems, Inc.’s notes dropped about 2 points to more than 5 points on more than $32 million of paper changing hands on Friday, a source said.

The 8% senior secured first-lien notes due 2026 (B2/B/BB-) declined 4¾ points to 80¼ bid by the close on $6.3 million of volume.

The company’s 6 7/8% senior secured notes due 2029 (Caa2/CCC/CCC) were quoted around 37¾ bid on lighter supply totaling $2 million.

CHS’ 5¼% senior secured notes due 2030 (B2/B/BB-) also went out the door down 2 points at 64¾ bid on stronger secondary activity totaling $11.2 million on Friday.

The Franklin, Tenn.-based operator of acute care and outpatient facilities will report third-quarter earnings results after the market closes on Wednesday.

Distressed index soft

S&P U.S. High Yield Corporate Distressed Bond index one-day returns remained soft on Thursday at minus 0.23%, compared to minus 0.96% on Wednesday, 0.43% on Tuesday and 0.58% on Monday.

Month-to-date total returns declined to minus 0.83% in the prior session from minus 0.6% on Wednesday, 0.36% on Tuesday and minus 0.07% on Monday.

Year-to-date total returns widened to minus 26.65% in the prior session from minus 25.95% on Tuesday and minus 26.26% on Monday.

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