AMC, Staples distressed paper stronger; Michaels gains; Community Health, Bausch up

By Cristal Cody

Tupelo, Miss., June 13 – Two distressed names stood out in the junk secondary market on Tuesday with strong trading action that put the paper among the day’s most active bonds on about $50 million of volume.

AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) jumped 2¼ points by the close on nearly $20 million of trading.

Staples Inc.’s 10¾% senior notes due 2027 (Caa2/CCC+) were more than 1 point better on more than $20 million of activity.

The day’s gains extended to other distressed names, too.

Michaels Cos., Inc.’s 7 7/8% senior notes due 2029 (Caa2/CCC) went out more than 1 point higher.

Stocks remained positive following the release of the Consumer Price Index May data on Tuesday and ahead of the Federal Open Market Committee’s rate decision on Wednesday.

Market analysts are widely expecting the Fed to pause its interest rate hikes.

The Nasdaq closed up 0.83%.

The iShares iBoxx High Yield Corporate Bond ETF rose 10 cents, or 0.13%, to $74.74.

Market volatility also receded. The CBOE Volatility index fell 2.66% to 14.61.

Distressed health care paper was lifted on Tuesday but moved off the day’s highs going out, sources said.

Community Health Systems Inc.’s 6 1/8% secured notes due 2030 (Caa2/CCC-) were up 1¼ points early in the session before pulling back to go out 1 point better on the day.

Bausch Health Cos. Inc.’s 8½% senior secured notes due 2027 (Caa1/CCC+/B) also gave back some of the morning’s gains to go out ¼ point better.

AMC bonds up

AMC Entertainment’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) rallied 2¼ points to head out Tuesday at 71½ bid in strong trading supply, a source said.

Secondary volume totaled $19.3 million.

The issue has climbed about 4½ points from the same session a week ago.

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) also added 1½ points on Tuesday to trade at 75 bid on $9.84 million of volume.

The Leawood, Kan.-based movie theater owner is awaiting a court decision in the Delaware Court of Chancery regarding a settlement in a shareholder lawsuit brought by Allegheny County Employees’ Retirement System over the company’s issuance of preferred stock.

AMC’s common shares (NYSE: AMC) closed up 4.38% at $5.

AMC’s preferred stock (NYSE: APE) also finished 1.26% higher at $1.61.

Staples’ notes better

Staples’ paper was seen about 1 point to over 1 point better on Tuesday on more than $27 million of trading action, a source reported.

The 10¾% senior notes due 2027 (Caa2/CCC+) went out more than 1¼ points higher at around 67 bid on $20.38 million of trading.

Staples is a Framingham, Mass.-based office products retail company owned by private equity firm Sycamore Partners.

Michaels improves

Michaels’ 7 7/8% senior notes due 2029 (Caa2/CCC) traded about 1½ points stronger early Tuesday and remained better on the day, going out 1 1/8 points higher at 69¾ bid, a source said.

The issue was quoted up 1 point on Monday.

The Irving, Tex.-based arts and crafts retailer was taken private in 2021 by funds managed by Apollo Global Management, Inc. affiliates.

Community Health up

Distressed health care paper was seen higher with Community Health’s 6 1/8% secured notes due 2030 (Caa2/CCC-) up 1¼ points at 58¾ bid early Tuesday, a source said.

The bonds pulled back slightly to head out 1 point better at 58½ bid.

Shares in the Franklin, Tenn.-based operator of acute care and outpatient facilities rose 4.86% on Tuesday to $4.10.

Bausch better

Also over the session, Bausch’s paper traded about ¼ point to ½ point better, sources said.

Bausch Health Americas, Inc.’s 8½% senior secured notes due 2027 (Caa1/CCC+/B) were ¾ point higher at 53¼ bid early in the session and were last seen late afternoon ¼ point stronger at 52¾ bid.

The Laval, Quebec-based pharmaceutical company’s stock (NYSE: BHC) improved 2.19% by the close to $7.45.

Year-to-date returns

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns opened the week at 0.28%, down from 0.36% on Friday and 0.47% in the same session a week ago.

Month-to-date total returns rose to 3½% on Monday, compared to 3.21% on Friday and 1.69% in the week-ago session.

Year-to-date total returns continued to improve on Monday to 10.37% versus 10.07% on Friday and 8.45% a week ago.

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