Party City sinks; AMC mixed; Rite Aid paper, CDS spreads on upswing; Telesat better

By Cristal Cody

Tupelo, Miss., Jan. 26 – Party City Holdings Inc.’s 8¾% senior secured notes due 2026 (D/C) sank 7½ points as the issue finished among the most active distressed notes traded on Thursday.

AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Caa3/CC) were up ½ point on nearly $13 million of bonds trading.

AMC’s paper was mixed with the 7½% senior secured first-lien notes due 2029 (Caa1/B-) down 1/8 point on $7 million of volume.

Rite Aid Corp.’s paper moved higher on Thursday in light supply, while its credit default swap spreads also tightened more than 175 basis points this week.

Rite Aid’s 7.7% senior bonds due 2027 (Caa2/CCC-/CCC) traded nearly 4 points better on the day.

Market tone was stronger with stock indices rebounding over the session and volatility receding. The S&P 500 closed up 1.1%.

The iShares iBoxx High Yield Corporate Bond ETF rose 19 cents to $76.39.

The CBOE Volatility index declined 1.73% to $18.75.

Telesat Corp.’s 5 5/8% notes due 2026 (B2/CCC+) also picked up 1¾ points by the end of the day on $2.4 million of secondary trading.

Party City notes drop

Party City’s 8¾% senior secured notes due 2026 (D/C) slid 7½ points by the close on Thursday with the issue quoted at 10½ bid, a source said.

Trading hit nearly $11.5 million with the issue yielding 133%.

The Woodcliff, N.J.-based party goods retailer’s bonds were seen in the same session a week ago at 21¼ bid.

Parent Party City Holdco Inc. and some of its subsidiaries filed for Chapter 11 bankruptcy on Jan. 17 in the U.S. Bankruptcy Court for the Southern District of Texas.

AMC second liens up

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CC) climbed ½ point to 47 bid on Thursday in strong trading action, a market source said.

Secondary supply totaled $12.9 million.

The issue carried a 39.8% yield.

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) went out on a 57 bid handle and down 1/8 point on $7 million of volume.

The company was downgraded by S&P Global Ratings on Dec. 28 after it announced plans to exchange $100 million of its second-lien notes due 2026 with debt holder Antara for preferred equity.

The Leawood, Kan.-based movie theater owner and gold and silver mine investor’s stock closed down 1.31% at $5.28.

Rite Aid improves

Rite Aid’s paper and its CDS spreads were on the move higher, market sources said Thursday.

The company’s 7.7% senior debentures due 2027 (Caa2/CCC-/CCC) rose nearly 4 points to a 46 bid handle in thin supply totaling less than $1 million.

Rite Aid’s 8% senior secured notes due 2026 (B3/CCC-/CCC) were trading at 55¼ bid on $3.4 million of activity on Thursday.

The bonds were up from 52¾ bid at the start of the week.

Rite Aid’s CDS spreads also firmed 176 bps for the past week ended Wednesday to 4,544 bps, according to a Moody’s Investors Service report.

The Camp Hill, Pa.-based drug retailer completed two debt exchanges in 2022, including for the 7.7% notes.

Telesat trades up

Telesat Canada LLC’s 5 5/8% senior secured notes due 2026 (B2/CCC+) added 1¾ points by the end of the session to trade at 42¾ bid, a market source said.

The issue saw $2.4 million of volume.

In 2021, the Ottawa-based satellite communications company and Loral Space & Communications Inc. completed a merger with the combined company publicly traded on the Nasdaq and Toronto Stock Exchange under the ticker “TSAT.”

Distressed index declines

S&P U.S. High Yield Corporate Distressed Bond index one-day returns moved down to minus 0.08% on Wednesday from 0.08% on Tuesday and 0.29% on Monday.

Month-, quarter- and year-to-date total returns fell to 7.31% mid-week from 7.39% on Tuesday and 7.31% at the start of the week.

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