CommScope paper mostly higher; AMC second-lien notes rally; Level 3 slides; Lumen lower

By Cristal Cody

Tupelo, Miss., Oct. 2 – CommScope Holding Co., Inc.’s paper attracted heavy secondary trading on Monday in the distressed space after posting strong gains ahead of the weekend.

The notes were mixed, a source reported, with the 8¼% senior notes due 2027 (Caa1/CCC+) down ½ point on nearly $20 million of paper turning over.

CommScope’s other paper was about ½ point or higher. The 5% senior notes due 2027 (Caa1/CCC+) traded over ½ point better on Monday on more than $12 million of volume.

Also in the distressed space on Monday, AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) rallied 1¼ points and traded over 3 points better from a week ago.

Meanwhile, AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) were down over ¼ point on Monday and about ½ point softer from a week earlier.

Junk and distressed bonds overall were under pressure as Treasury yields shot up, market sources said.

The iShares iBoxx High Yield Corporate Bond ETF fell 44 cents, or 0.61%, to $71.89.

The benchmark 10-year Treasury note yield climbed 11 basis points to 4.68%.

Volatility was marginally higher on the day. The CBOE Volatility index rose 0.51% to 17.61.

Level 3 Financing, Inc.’s notes were counted among the day’s weakest bonds traded.

Parent Lumen Technologies, Inc.’s paper also was under pressure.

Level 3’s 4¼% senior notes due 2028 (B3/CCC+/B) declined 2¼ points over the session.

CommScope mixed

CommScope, Inc.’s 8¼% senior notes due 2027 (Caa1/CCC+) declined ½ point on Monday on nearly $19.8 million of secondary volume, a source reported.

The notes were quoted at 68½ bid.

The issue traded Friday nearly 1½ points better before rallying over 4 points in a late trade ahead of the weekend.

CommScope’s other paper improved on Monday. The 5% senior notes due 2027 (Caa1/CCC+) rose more than ½ point to 58 5/8 bid on $12.8 million of volume.

The Hickory, N.C.-based network infrastructure manufacturer’s 7 1/8% senior notes due 2028 (Caa1/CCC+) also added ½ point to 61¼ bid on $10.4 million of trading on Monday.

AMC bonds mixed

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) rallied 1¼ points on Monday to head out at 74¼ bid, a source said.

The issue saw $6 million of volume.

The notes have gained from where the issue traded at 71 bid in the same session last week.

Meanwhile, AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) were down over ¼ point on Monday with a 69 bid handle on $4.8 million of trading.

The Leawood, Kan.-based movie theater owner’s first-lien notes have declined ½ point from a week ago.

Level 3, Lumen drop

Level 3’s 4¼% senior notes due 2028 (B3/CCC+/B) slid 2¼ points in the secondary market by the time the day wrapped, a source said Monday.

The notes traded at 60¼ bid on $5 million of volume.

The issue was unchanged on Friday.

Level 3’s 3 5/8% senior notes due 2029 (B3/CCC+) also fell ½ point to head out Monday at 55½ bid on $4 million of activity.

The notes were quoted on Friday trading at 55¾ bid, 56¾ offered.

In addition on Monday, parent Lumen Technologies’ 4% senior secured notes due 2027 (Caa2/B) shed over 1 point to go out around 64½ bid on $3.7 million of volume.

The Denver-based telecommunications company is facing numerous issues, including a heavy debt load, ratings downgrades from Moody’s Investors Service and Fitch Ratings, a class-action lawsuit over risks regarding Lumen’s lead-covered cable infrastructure and the formation of a bondholder group formed to discuss refinancing options and covenant compliance for the proceeds from the sale of the company’s Latin American business.

September returns positive

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns finished Friday positive at 0.51%, up from minus 0.13% on Thursday and minus 0.09% at the week’s start.

Month-to-date total returns for September ended at 0.55%, improved from 0.04% in the prior session but down from 1.02% at start of the final week of the month.

Returns were down from 1.9% in August, 2.96% in July and 4.67% in June.

Year-to-date distressed total returns on Friday were 17.777%, up from 17.17% on Thursday but down from 18.32% in the first session of the week.

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