AMC bonds attract secondary interest; Party City notes up; Bed Bath & Beyond stronger

By Cristal Cody

Tupelo, Miss., Nov. 14 – AMC Entertainment Holdings, Inc.’s notes attracted heavy secondary interest on Monday with more than $40 million of paper traded following the long holiday weekend.

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) were quoted 3 points better than where the issue went out on Thursday ahead of the Veterans Day holiday after the movie theater chain reported high weekend attendance.

Markets were mixed with stocks giving back some of the prior week’s gains following the release of the October Consumer Price Index.

The Nasdaq fell 1.12%.

The iShares iBoxx High Yield Corporate Bond ETF declined 55 cents, or 0.74%, to $73.90.

The CBOE Volatility index moved up more than 5% on the day to $23.73.

Oil prices dropped. The West Texas Intermediate crude oil benchmark futures for December delivery settled down $3.09 to $85.87 a barrel.

Other distressed names also were trading higher on Monday.

Party City Holdings Inc.’s 8¾% senior secured notes due 2026 (Caa1/CCC+) rose 2 points at the start of the session and held on to gains by the day’s end.

Bed Bath & Beyond Inc.’s notes were stronger in busy secondary trading after the distressed retailer reported it entered into exchange agreements with holders of its 3.749% senior notes due 2024, 4.195% senior notes due 2034 and 5.165% senior notes due 2044.

The 3.749% senior notes due 2024 (C/D) traded more than 4 points higher from where the issue went out ahead of the holiday weekend.

S&P Global Ratings dropped the retailer to selective default on Monday and lowered the notes to D from CC.

AMC paper gains

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) went out Monday higher at 40½ bid on more than $42 million of secondary volume, a source said.

The notes climbed from trading Thursday at 37½ bid, then 1 1/8 points better on the day on $31.5 million of supply.

AMC said Monday that it posted its fourth highest weekend for attendance in 2022 and fifth busiest weekend since reopening in 2020 after more than 4.9 million people attended one of its locations over the past weekend period from Thursday through Sunday.

The Leawood, Kan.-based movie theater owner and gold and silver mine company reported in the prior week heavy third-quarter losses.

Party City higher

Party City’s 8¾% senior secured notes due 2026 (Caa1/CCC+) traded 2 points better on Monday at 42 bid, according to a market source.

The bonds sank more than 14 points in the prior week.

Fitch Ratings downgraded the issuer on Friday to CCC from B- with the agency noting a higher likelihood the company will enter into some type of restructuring.

In the prior week, Party City reported a third-quarter net loss and lower sales.

The Woodcliff, N.J.-based retailer also said Halloween performance was at the lower end of its expectations.

Bed Bath & Beyond up

Bed Bath & Beyond’s notes climbed on Monday after the distressed retailer reported the exchange agreements, a market source said.

The 3.749% senior notes due 2024 (C/D) were seen late afternoon at 29½ bid, up from the 25 bid area on Thursday.

Bed Bath & Beyond’s other issues, the 4.195% senior notes due 2034 and 5.165% senior notes due 2044, were trading with a 13 handle on Monday, up about 2 points to 4 points from Thursday.

The company said Monday that institutional holders in the privately negotiated agreement agreed to exchange approximate $69 million of 2024 notes, $5.8 million of 2034 notes and $48.2 million of 2044 notes in a transaction set to close on Wednesday.

Bed Bath & Beyond will issue an aggregate 11.7 million shares of common stock to the holders in exchange for the notes.

On Nov. 9, the company reported it entered into an agreement with a holder of its 4.915% notes due 2034 to exchange $9.5 million of the issue and to exchange $22 million of the 5.165% notes for an aggregate 2.8 million shares of common stock. That deal was scheduled to settle on Monday.

The retailer announced in October offers to exchange the senior notes for new second-lien and third-lien debt.

The Union, N.J.-based home products retailer has been implementing strategic changes, including closing stores.

Distressed index improves

S&P U.S. High Yield Corporate Distressed Bond index one-day returns finished Thursday higher at 1.41%, compared to minus 0.98% on Wednesday, minus 0.18% on Tuesday and 0.26% at the prior week’s start.

Month-to-date total returns for November improved to minus 1.85% on Thursday from minus 3.21% on Wednesday, minus 2.26% on Tuesday and minus 2.09% in the first session of the week.

Year-to-date total returns rose to minus 27.05% in Thursday’s session from minus 28.06% on Wednesday, minus 27.35% on Tuesday and minus 27.22% at the week’s start.

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