AMC paper gives back in heavy secondary volume; Lumen gains; Carvana trades higher

By Cristal Cody

Tupelo, Miss., Feb. 22 – AMC Entertainment Holdings, Inc.’s bonds gave back ¼ point to ½ point in heavy secondary trading on Wednesday that hit nearly $40 million.

The issuer was the top distressed name seen over the session, a source said.

Wednesday’s heavy trading followed the company’s upgrade to CCC+ from SD by S&P Global Ratings after AMC completed a distressed debt-for-equity swap.

Lumen Technologies, Inc.’s 4½% notes due 2029 (B2/B+) saw a turnaround with the paper up nearly 1¾ points in one of the most active distressed issues during the session, a source said. Secondary trading topped $18 million.

The bonds were down 2¾ points on more than $10 million of volume in Tuesday’s session.

Other distressed names also were active, sources said.

Bonds from distressed online car retailer Carvana Co. moved up ¼ point in secondary trading that hit $8.5 million over the session.

Market tone was mixed after Tuesday’s sell-off and following the release on Wednesday of the minutes from the Federal Reserve’s last policy meeting.

The iShares iBoxx High Yield Corporate Bond ETF rose 48 cents, or 0.65%, to $73.89.

The CBOE Volatility index receded about 2½% to $22.30.

AMC moves lower

AMC’s paper was at the top of the heaviest traded distressed names seen over the session on about $39 million of volume, a source said.

The company’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) fell ½ point to 53½ bid on $23.25 million of trading.

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) declined ¼ point to head out at 60¼ bid.

Supply totaled more than $15.5 million.

S&P said Wednesday it upgraded the second-lien notes to CCC- from SD following AMC’s completion of a distressed debt exchange.

AMC reported that on Feb. 7 it issued preferred equity units for $75.1 million to an investor and simultaneously purchased $100 million of its 10½% cash/PIK toggle second-lien notes due 2026 in exchange for its preferred equity units and cash.

The company said that it has repurchased $85.2 million of outstanding debt since Dec. 19 at an average discount of approximately 49%, including additional repurchases of $56.9 million of the 10½% cash/PIK toggle notes and $4.1 million of its 5 7/8% senior subordinated notes due 2026.

The Leawood, Kan.-based movie theater owner will report fourth-quarter and fiscal 2022 earnings results on Tuesday.

Lumen notes improve

Lumen’s 4½% notes due 2029 (B2/B+) recovered more than 1½ points to trade at a print of 50.925 bid in heavy secondary supply on Wednesday of more than $18 million, a source said.

The bonds were down 2¾ points at 49 bid on more than $10 million of volume in Tuesday’s session.

The issue gave back about 6 points over the prior week.

The Denver-based telecommunications company’s 5 3/8% notes due 2029 (B2/B) also traded with a 53 bid handle on $8 million of volume on Wednesday.

Carvana better

Carvana’s 10¼% notes due 2030 (Caa2/CCC) picked up ¼ point to a quote of 56 bid in fairly active supply on Wednesday ahead of its earnings release, a source reported.

Secondary volume totaled $8.5 million.

The bonds went out Friday at 55¼ bid.

Carvana was in the primary market last week with a $363.25 million asset-backed deal.

The Phoenix-based online car retailer will release fourth-quarter and fiscal 2022 results on Thursday.

Distressed index declines

S&P U.S. High Yield Corporate Distressed Bond index one-day returns softened to minus 0.91% on Tuesday in the first session of the Presidents Day-holiday week.

Returns fell from minus 0.45% on Friday and 0.13% in the same session last week.

Month-to-date returns declined to minus 0.41% from 0.5% ahead of the weekend and 0.57% in the week-ago session.

Quarterly and year-to-date total returns were 7.54% on Tuesday, down from 8.52% on Friday and 8.6% on Tuesday.

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