Michaels paper trades up; DISH bonds on upswing; AMC notes rally; market data eyed

By Cristal Cody

Tupelo, Miss., Oct. 6 – Michaels Cos., Inc.’s bonds limped back on Friday in lighter secondary activity after the paper dove 3¼ points to 3½ points on Thursday on $39 million of volume.

Michaels’ 7 7/8% senior notes due 2029 (Caa2/CCC-) added ¾ point.

DISH Network Corp.’s bonds continued to trade heavily on Friday and were among the most active junk and distressed names and biggest gainers during the session.

The notes extended Thursday’s turnaround following a midweek slide after the FCC announced a penalty over the company’s space junk.

The 7¾% senior notes due 2026 (Caa2/B-) were up 7/8 point.

The company’s 5 1/8% senior notes due 2029 (Caa2/B-) climbed 2 points.

AMC Entertainment Holdings, Inc.’s paper also saw some of the biggest gains in the secondary market on Friday.

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) picked up 2 points, while the 7½% senior secured first-lien notes due 2029 (Caa1/B-) added ¾ point.

Volatility declined going into the long holiday weekend. The bond markets will be closed on Monday for the Columbus Day holiday.

The CBOE Volatility index fell 5.62% to 17.45.

Stock indices rallied over the session. The S&P 500 index closed up 1.18%.

The iShares iBoxx High Yield Corporate Bond ETF added 10 cents, or 0.14%, to $72.69.

Treasury yields climbed again on Friday after a mixed jobs report. The benchmark 10-year note yield rose 6 basis points to 4.78%. The 30-year bond yield finished up 5 bps at 4.94%.

The Labor Department reported that September non-farm payroll employment jumped by a seasonally adjusted 336,000 jobs, higher than the 170,000 increase analysts expected.

The unemployment rate was flat at 3.8%, lower than a 3.7% rate forecast.

“The September jobs report was unequivocally strong, with hiring handily surpassing the upper bound of the consensus forecast range – and substantial upward revisions confirm additional residual strength,” BNP Securities analysts said in a note on Friday.

“While the data alone likely justify the Fed hiking rates further in either November or December, we think it is less clear-cut, as policymakers – who are very much enthralled with the prospect of a soft landing – are increasingly noting the tightening of financial conditions of late doing some of their heavy lifting. In other words, a stinging market response to payrolls (and other data) could be at least as effective as an additional 25 bp hike.”

DISH notes higher

DISH DBS Corp.’s 7¾% senior notes due 2026 (Caa2/B-) traded up 7/8 point to 70¾ bid on $19.75 million of volume by the afternoon, a source said.

The issue added nearly 1 point on Thursday on $40.95 million of volume.

The company’s 5 1/8% senior notes due 2029 (Caa2/B-) also climbed 2 points to 54½ bid on $5 million of trading on Friday.

On Thursday, the notes improved 5/8 point on $8.7 million of supply.

The FCC announced on Monday a settlement with the Englewood, Colo.-based satellite cable operator that includes a penalty of $150,000 and an admission of liability for failure to properly deorbit its EchoStar-7 satellite.

Michaels notes up

Michaels’ 7 7/8% senior notes due 2029 (Caa2/CCC-) recovered ¾ point on Friday to a quote of 60¾ bid after shedding 3½ points over the prior day, a source said.

Trading was much lighter with $2 million of volume following Thursday’s heavy trading supply totaling $18 million.

Michaels’ 5¼% senior secured notes due 2028 (B2/CCC+) also were ½ point better on Friday at 75¼ bid on $9.5 million of activity.

In Thursday’s session, the bonds were down 3¼ points on more than $31 million of trading.

The Irving, Tex.-based arts and crafts retailer and the bonds were downgraded on Wednesday by S&P Global Ratings.

AMC paper stronger

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) picked up 2 points to hit 77 bid on $6.5 million of secondary activity on Friday, a source reported.

The notes were going out about 4 points better on the week.

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) also added ¾ point to trade at 70½ bid in light volume totaling $1 million.

The Leawood, Kan.-based movie theater owner’s first-lien notes were about 1¼ points higher from a week ago.

Distressed returns higher

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns improved on Thursday in the first positive session of the week to 0.06%.

One-day returns were at minus 0.04% on Wednesday, minus 1.68% on Tuesday and minus 0.73% on Monday.

Month-to-date total return losses narrowed to minus 2.39% on Thursday, compared to minus 2.44% on Wednesday, minus 2.4% on Tuesday and minus 0.73% in the first session of October.

Year-to-date distressed total returns rose to 14.96% in the prior session from 14.9% midweek, 14.94% on Tuesday and 16.91% on Monday.

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