AMC notes move higher after court hearing set; Staples better; Grubhub bonds decline

By Cristal Cody

Tupelo, Miss., June 22 – Paper from AMC Entertainment Holdings, Inc. topped secondary trading action in the junk and distressed markets on Thursday after the company received notice that a settlement hearing over the company’s issuance of preferred stock will be held by the end of the month.

AMC Entertainment’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) rallied 2 1/8 points on close to $30 million of volume.

The notes were down 1 point on Wednesday.

AMC’s common stock declined nearly 8%, while its preferred shares climbed over 7% on Thursday.

Bonds from Staples Inc. turned positive and gained about 1¾ points to 1 7/8 points in strong trading totaling more than $23 million over the session, a source said.

Staples’ 10¾% senior notes due 2027 (Caa2/CCC+) recovered 1¾ points after declining 4¼ points on Wednesday.

Stocks were mostly higher after Federal Reserve chairman Jerome Powell’s Senate testimony on Thursday.

The S&P 500 index rose 0.37%.

The iShares iBoxx High Yield Corporate Bond ETF fell 22 cents, or 0.3%, to $74.32.

Measured market volatility dropped to its lowest level in at least three years. The CBOE Volatility index declined 2.2% to 12.91.

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

In other trading Thursday, Grubhub Holdings Inc.’s 5½% senior notes due 2027 (B3/B-) were trading 1½ points lower in the distressed space.

AMC moves higher

AMC Entertainment’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) rallied 2 1/8 points to 72 1/8 bid in heavy secondary action on Thursday after a settlement hearing was set, a source said.

The bonds saw $28.5 million of trading.

The notes were down 1 point on Wednesday on $13.4 million of activity.

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) were modestly higher at 72¼ bid on $13 million of secondary action on Thursday.

The issue gave back more than 1¾ points on Wednesday on $6 million of volume.

The Leawood, Kan.-based movie theater owner had been 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.

On Thursday, AMC received notice of a two-day settlement hearing scheduled for June 29-30.

AMC’s common stock (NYSE: AMC) slid 7.95% on Thursday to $4.17.

AMC’s preferred stock (NYSE: APE) jumped 7.06% on the day to $1.82.

Staples improves

Staples’ 10¾% senior notes due 2027 (Caa2/CCC+) recovered 1¾ points on $11 million of trading action on Thursday, a source said.

The bonds were quoted at 57 1/8 bid.

Staples’ senior notes were down 4¼ points on Wednesday on $9.44 million of volume.

The notes went out in the prior week at 62¼ bid.

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

Grubhub declines

Grubhub Holdings’ 5½% senior notes due 2027 (B3/B-) declined 1½ points to a quote of 60 bid by Thursday afternoon, a market source said.

The issue saw $4.2 million of trading supply.

Grubhub chief executive officer Howard Migdal announced on June 12 the company planned to lay off around 15% of employees, or approximately 400 positions.

The food delivery and online order company became part of the Amsterdam-based Just Eat Takeaway.com portfolio of brands in 2021.

Distressed returns drop

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns softened to minus 0.47% on Wednesday from 0.04% on Tuesday in the first session of the short holiday week.

Month-to-date total returns slipped to 4.6% versus 5.09% on Tuesday.

Year-to-date distressed total returns declined to 11.54% in the previous session from 12.07% at the week’s start.

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