AMC paper declines; Staples’ senior and secured bonds pressured; iHeartMedia notes down

By Cristal Cody

Tupelo, Miss., June 21 – Distressed paper moved lower on Wednesday with issues from AMC Entertainment Holdings, Inc. among the most active over the session.

AMC Entertainment’s bonds traded down about 1 point to more than 1¾ points in one of the most active distressed names seen trading.

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) were down 1 point on $13.4 million of volume.

Market tone was mixed following Federal Reserve chairman Jerome Powell’s Congressional testimony on Wednesday.

The S&P 500 index fell 0.52%.

The iShares iBoxx High Yield Corporate Bond ETF gave back 19 cents, or 0.25%, to $74.54.

Measured market volatility receded further to its lowest since 2020 over the session. The CBOE Volatility index fell 4.9% to 13.20.

Powell on Wednesday spoke before the U.S. House Financial Services Committee and will appear before the U.S. Senate Committee on Banking, Housing and Urban Affairs on Thursday.

Powell noted in his prepared testimony that the Federal Open Market Committee left rates unchanged last week, but “Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year.”

Staples Inc.’s paper saw further erosion in steady trading on Wednesday after going out Friday down about 1½ points on more than $30 million of secondary action.

Declines also continued on Wednesday in iHeartMedia, Inc.’s paper.

iHeartMedia’s 8 3/8% senior notes due 2027 (Caa1/B-) fell 1¼ points on $8 million of trading.

AMC notes decline

AMC Entertainment’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) traded down 1 point to 70 bid on $13.4 million of volume on Wednesday, a source said.

The notes were yielding nearly 25%.

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) also were down more than 1¾ points at around 72 bid and a 15% yield on $6 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 stock (NYSE: AMC) finished down 1.31% on Wednesday at $4.53.

AMC’s preferred stock (NYSE: APE) closed off 2.3% at $1.70.

Staples moves lower

Staples’ 10¾% senior notes due 2027 (Caa2/CCC+) sank 4¼ points on Wednesday to 55½ bid on $9.44 million of secondary action, a market source said.

The yield was 31.6%.

The notes went out in the prior week at 62¼ bid and yielding over 27%.

Staples’ 7½% senior secured notes due 2026 (B3/B) were quoted down 7/8 point at 80 7/8 bid and a 16.23% yield on $4.5 million of trading during the session.

The issue went into the holiday weekend on an 82 bid handle and a yield of more than 15%.

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

iHeartMedia softens

iHeartCommunications, Inc.’s 8 3/8% senior notes due 2027 (Caa1/B-) traded down 1¼ points to 64 bid on $8 million of activity by Wednesday afternoon, a source reported.

The bonds have dropped more than 4 points since Thursday.

The San Antonio-based media broadcasting company’s stock (Nasdaq: IHRT) closed down 2.27% at $3.45.

Distressed index improves

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns totaled 0.04% on Tuesday at the start of the short holiday week.

One-day returns were down from 0.41% on Friday and 0.6% in the same session a week ago.

Month-to-date total returns rose to 5.09% on Tuesday, compared to 5.05% on Friday and 4.12% in the week-ago session.

Year-to-date distressed total returns improved on Tuesday to 12.07% from 12.03% ahead of the long holiday weekend and 11.04% the same day last week.

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