AMC bonds stronger on day, week; Bausch Health notes mixed; December distressed returns up

By Cristal Cody

Tupelo, Miss., Dec. 15 – Trading remained strong in AMC Entertainment Holdings, Inc.’s junk and distressed paper Friday after the company reported it will exchange $36 million of its 10%/12% cash/PIK second-lien subordinated notes due 2026 for class A shares in a series of privately negotiated agreements.

At the start of the week, AMC reported it completed a $350 million at-the-market equity offering and repurchased $50 million principal amount of its 10%/12% cash/PIK second-lien subordinated notes due 2026.

Bausch Health Cos. Inc.’s 11% senior secured first-lien notes due 2028 (Caa1/CCC+/B) were under pressure with the distressed bonds down over 1 point on nearly $12 million of activity.

Market tone was mostly soft Friday as desks clear in the runup to an expected slow upcoming week.

The iShares iBoxx High Yield Corporate Bond ETF slumped 17 cents, or 0.22%, to $76.93.

Elsewhere, S&P U.S. High Yield Corporate Distressed Bond index month-to-date total returns climbed to nearly 6% on Thursday, while year-to-date distressed total returns improved to more than 21% in the prior session.

AMC notes higher

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) rose ¾ point Friday to 84¾ bid with a yield of 17.85% in one of the session’s busiest bonds, a source said.

Trading totaled $15.5 million.

The notes were ending the week about 3¾ points better.

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) edged up less than 1/8 point to just under 70 bid on $6 million of trading.

The secured notes were going out more than 2 points higher on the week.

AMC said in an 8-K filing on Friday that the shares under the latest exchange have an implied value of $7.67 per share.

On Monday, AMC announced that it repurchased $50 million principal amount of its 10% second-lien notes due 2026 at an average discount of 19.67% plus accrued interest and exchanged $12.28 million principal amount of its 10%/12% cash/PIK toggle second-lien subordinated notes due 2026 plus accrued interest for stock with an implied value of $8.19 per share.

The Leawood, Kan.-based movie theater owner’s stock (NYSE: AMC) closed down 0.89% to $6.65 in heavy trading on Friday.

Bausch secureds drop

Bausch Health Americas, Inc.’s 11% senior secured first-lien notes due 2028 (Caa1/CCC+/B) moved off more than 1 point Friday to 69¼ bid by the close, a source said.

The bonds were active on $11.63 million of volume reported.

While lower on the day, Bausch’s notes have climbed more than 5 points since the end of November.

The 6 1/8% senior secured notes due 2027 (Caa1/CCC+/B) went out flat at 65 bid in light trading totaling $3 million during the session.

The Laval, Quebec-based pharmaceutical company is facing issues that include a securities class action lawsuit over alleged violations of federal securities laws and concerns with its plans to spin off Bausch + Lomb Corp.

Distressed index gains

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns jumped to 2.76% on Thursday from 0.4% midweek, 0.38% on Tuesday and 0.14% on Monday.

Month-to-date total returns hit 5.67% Thursday, after finishing Wednesday at 2.83%, Tuesday at 2.43% and Monday at 2.04%.

Year-to-date distressed total returns also soared to 21.56% over Thursday’s session, up from 18.29% on Wednesday, 17.82% on Tuesday and 17.37% on Monday.

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