AMC notes trade mixed; Bausch Health paper declines; Adani claws back some losses

By Cristal Cody

Tupelo, Miss., Feb. 3 – Distressed trading action slowed on Friday, but AMC Entertainment Holdings, Inc.’s paper remained active in the secondary market.

The company’s notes were mixed with the 7½% senior secured first-lien notes due 2029 (Caa1/B-) up more than ¼ point and the 10% senior secured second-lien notes due 2026 (Caa3/CC) down 3/8 point.

Bausch Health Cos. Inc.’s notes shed about ¾ point to 2 points in steady trading on Friday.

Stocks moved down over the session, while volatility declined following the Labor Department’s blockbuster January jobs report.

The CBOE Volatility index fell 2% by the close to $18.33.

The iShares iBoxx High Yield Corporate Bond ETF dropped 81 cents, or 1.05%, to $76.39.

A “mixed market reaction” was expected following a strong U.S. job report, which reduces the likelihood of a recession beginning in the first quarter, Doug Duncan, chief economist at Fannie Mae, said in a statement Friday.

The Labor Department reported that non-farm payroll numbers for January climbed by 517,000, much higher than the 188,000 gain expected by analysts.

The unemployment rate fell to a seasonally adjusted 3.4%, below a widely expected increase to 3.6% from the 3.5% rate in December.

The rate is the “lowest reading since 1969,” Duncan said.

BofA Securities high-yield analysts reported Friday they have cut their 12-month default forecast to 4%.

In other distressed paper, Adani Green Energy Ltd.’s bonds recovered some of the week’s losses on Friday with the 4 3/8% senior secured notes due 2024 (Ba3) up 9 points on $8.5 million of trading.

The bonds had dropped 11 points on Thursday and 12¼ points on Wednesday.

Adani Green Energy’s credit default swap spreads moved out more than 1,000 basis points over the week.

AMC first-lien notes up

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) were more than ¼ point better at a 65 bid handle in late afternoon trading on Friday, a source said.

Volume totaled $11.5 million.

The notes added 3 1/8 points on Thursday on $22.5 million of secondary supply.

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CC) softened Friday with the issue down 3/8 point at 55¾ bid on $6 million of trading.

The 10% notes from the Leawood, Kan.-based movie theater owner traded 2 points better on $14 million of volume in Thursday’s session.

Bausch paper softens

Bausch’s notes were among the decliners in the distressed space on Friday, a source said.

The 9% senior notes due 2025 (Ca/CCC/CC) fell 1 point by late afternoon to 80½ bid.

Trading was steady on $6 million of volume.

Bausch’s 4 7/8% senior secured notes due 2028 (Caa1/B-/B) declined 1½ points to a 63 bid handle on more than $5 million of activity.

The Laval, Quebec-based pharmaceutical company’s 6 1/8% senior secured notes due 2028 (Caa1/B-/B) traded down ¾ point to 69¼ bid on $5 million of volume on Friday.

Bausch’s 11% senior secured first-lien notes due 2028 (Caa1/B-/B) also were off about 2 points at the 78 bid area on $4 million of trading during the session.

Adani rallies

Adani Green Energy’s 4 3/8% senior secured notes due 2024 (Ba3) recovered 9 points to head into the weekend at 72½ bid on $8.5 million of trading on Friday, a source said.

The bonds had dropped 11 points on Thursday and 12¼ points on Wednesday.

Adani Green Energy’s credit default swap spreads moved out 1,074 bps for the past week ended Wednesday, according to a Moody’s Investors Service note.

The company’s CDS spreads for the week ended Feb. 1 were 1,537 bps, compared to 463 bps for the week ended Jan. 25.

Adani Group’s paper has been volatile over the week with the India-based renewable energy company facing fraud allegations from U.S.-based short seller Hindenburg Research.

Adani Enterprises Ltd. on Wednesday pulled an equity offering that had closed Tuesday.

Distressed returns stronger

S&P U.S. High Yield Corporate Distressed Bond index one-day returns climbed to 1.93% on Thursday from 0.3% on Wednesday, minus 0.04% on Tuesday and 0.12% on Monday.

Month-to-date returns rose to 2.24% on Thursday from 0.3% on Wednesday. January returns were 7.99%.

Quarterly and year-to-date total returns improved Thursday to 10.41% from 8.32% on Wednesday, 7.99% on Tuesday and 8.03% at the start of the week.

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