AMC bonds decline; QVC, Qurate Retail post improvements; First Republic Bank paper higher

By Cristal Cody

Tupelo, Miss., April 6 – AMC Entertainment Holdings, Inc.’s bonds fell about ˝ point to more than 1 point as one of the most active names in the distressed secondary market Thursday.

Volume totaled more than $23 million.

The heavy trading came after AMC disclosed in an 8-K filing with the Securities and Exchange Commission on Thursday that a court blocked its motion to lift a status quo order.

AMC reported that it entered into a binding settlement on Sunday with plaintiffs to settle shareholder litigation regarding its preferred stock issuance.

On Monday, the company filed an unopposed motion to lift the order, but the court on Wednesday denied the motion.

“Unless and until the court lifts the status quo order, the company will not proceed with filing the amendment to the company’s certificate of incorporation to effect the share increase and the reverse stock split previously approved by stockholders or the conversion of AMC preferred equity units into class A common stock,” AMC said in the filing.

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) were down more than 1˝ points on $13 million of paper traded Thursday.

Some distressed retail paper was trading better as the week wound down, a source said.

QVC Inc. notes improved modestly by about ˝ point on about $7 million of supply during the session.

Parent company Qurate Retail Inc.’s credit default swap spread also came in nearly 200 basis points this week.

Financial paper was trading higher Thursday in light activity ahead of the short market session on Friday.

First Republic Bank’s 4 5/8% subordinated notes due 2047 (B2/B-) rose nearly 1 point on $1.6 million of activity.

Stock indices closed the day slightly better. The S&P 500 index was up 0.36%.

The iShares iBoxx High Yield Corporate Bond ETF improved 33 cents to $74.84 Thursday.

Measured market volatility waned. The CBOE Volatility Index declined 3.56% to 18.40.

The bond markets will close early Friday for the Good Friday holiday with traders and investors keeping an eye out for the release of the Labor Department’s March employment report, sources said.

“Although hours will be limited, fixed income will be another market to gauge investors’ perceptions of the U.S. labor market,” according to a Confluence Investment Management note on Thursday. “Fixed income and currencies will give hints to how the market may open on Monday.”

The Federal Reserve Bank of New York said its Weekly Economic Index rose to 1.71% for the week ended Saturday from 1.43% in the week ended March 25, while its Global Supply Chain Pressure Index Estimates showed that “global supply chain pressures decreased again” in March, falling from 0.28 to 1.06 standard deviations below the index’s historical average.

The index’s recent movements suggest that global supply chain conditions have largely normalized after experiencing temporary setbacks around the turn of the year, the Federal Reserve said.

AMC lower

AMC Entertainment’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) dropped more than 1˝ points to 65˝ bid on $13 million of paper traded Thursday afternoon, a source reported.

AMC’s 7˝% senior secured first-lien notes due 2029 (Caa1/B-) were down ˝ point at 69 bid on $10.5 million of secondary supply.

The company said in Thursday’s regulatory filing that it is “continuing to evaluate next steps.”

Before the settlement was reached, the Leawood, Kan.-based movie theater owner had an April 27 court hearing over the lawsuit from Allegheny County Employees’ Retirement System in the Delaware Court of Chancery regarding the issuance of preferred equity.

The company’s common stock rallied 21% Thursday to $4.90 in heavy volume totaling more than 100 million shares, outpacing the average volume of 37.4 million shares.

AMC’s preferred shares were trading down 12.87% by the close at $1.49.

QVC, Qurate better

QVC’s notes improved modestly about ˝ point on about $7 million of secondary volume during the session, a source said.

QVC’s 4 3/8% senior secured notes due 2028 (B2/B-) rose more than ˝ point to around 42˝ bid on $4 million of trading Thursday.

Parent company Qurate Retail’s credit default swap spread also came in nearly 200 bps this week.

Qurate Retail’s CDS spread tightened 189 bps over the past week ended Wednesday to 4,304 bps, according to a Moody’s Investors Service report.

S&P Global Ratings and Fitch Ratings downgraded the West Chester, Pa.-based home shopping network company in March.

First Republic up

First Republic Bank’s 4 5/8% subordinated notes due 2047 (B2/B-) got a lift along with other financial paper Thursday and traded nearly 1 point higher at around 55 bid, a source said.

Overall trading action was light on $1.6 million of volume.

First Republic Bank, cut to junk status in March by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings, received a rescue when 11 major banks announced March 16 they would make $30 billion of deposits into First Republic.

The San Francisco-based bank’s stock closed Thursday up 4.39% at $14.03.

Distressed index lower

S&P U.S. High Yield Corporate Distressed Bond index one-day returns softened further Wednesday to minus 0.6% from minus 0.06% on Tuesday and 0.62% on Monday.

Month-to-date returns declined to minus 0.05% from 0.55% on Tuesday and 0.62% on Monday.

Year-to-date total returns dropped midweek to 4.47% from 5.1% on Tuesday and 5.17% at the start of the week.

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