DISH notes dominate trading; selling pressure subsides as creditors weigh legal options

By Abigail W. Adams

Portland, Me., Jan. 12 – The distressed debt space was largely flat on Friday with trading volume thin excepted for one name – DISH Network Corp.

DISH’s senior notes issued by DISH DBS Corp. were again lower in heavy volume on Friday.

However, the selling pressure that dragged the notes down 10 to 15 points over the past two sessions seemed to subside as creditors pursue legal options in response to an asset reshuffle that lowered the recovery value of the notes.

DISH’s senior notes have dominated the attention of the distressed debt space since Wednesday when the asset shuffle was announced.

Outside of DISH, few names were moving during Friday’s session.

AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) continued to edge lower with the notes seeing large losses over the past two weeks.

DISH in focus

DISH remained the name of the day on Friday with the notes again moving lower.

However, the selling pressure that dragged the notes down double digits over the past three sessions tempered with the notes appearing to be approaching their bottom, a source said.

The notes were off 0.5 to 1 point in heavy volume.

The 5 1/8% senior notes due 2029 (Caa2/CCC+) sank about 5/8 point to a 37-handle.

They closed the day wrapped around 37¼ with the yield 28¾%, a source said.

There was $23 million in reported volume.

The notes have lost 13 to 14 points over the past three sessions.

They were wrapped around 49 prior to the asset reshuffle.

DISH’s 7¾% senior notes due 2026 were off about ½ point to close the day wrapped around 58 with the yield about 34 3/8%.

There was $10 million in reported volume.

The notes have lost 11 points over the past three sessions.

They were trading on a 69-handle prior to Wednesday’s announcement.

DISH’s soon-to-mature 5 7/8% senior notes due Nov. 15, 2024 were also lower in heavy volume.

The notes sank to a 91-handle and closed the day wrapped around 91¼ with the yield about 17 5/8%.

The notes were the most actively traded in the debt stack and among the most active issues in the market on Friday.

There was $70 million in reported volume.

The notes were spared the destruction seen its other notes with the market still anticipating the notes will be covered upon their quickly approaching maturity.

DISH’s senior notes were destroyed after the company announced that it was moving its unencumbered wireless spectrum licenses to the newly formed subsidiary EchoStar Wireless Holding LLC.

The move pushed the assets outside of the reach of the heavily indebted DISH DBS with the company appearing to saddle the weaker portion of its capital structure with debt.

S&P Global Ratings lowered the company’s unsecured debt to CCC+ from B- with the asset shuffle lowering the recovery prospects of the notes.

However, the heavy selling seen on Wednesday and Thursday tempered on Friday as news circulated that creditors were exploring legal options, including labeling the asset transfer a technical default.

AMC lower

AMC’s 10% senior secured second-lien notes due 2026 continued to edge lower on Friday with the notes seeing notable losses over the past two weeks.

The 10% notes were off another ½ point to close the day wrapped around 80 with the yield about 21%, a source said.

The notes have shaved off 6 points over the past two weeks as investors shed exposure to companies at risk of default.

Indexes

The S&P High Yield Corporate Distressed index was down 0.6% on Thursday with the year-to-date return now negative 2.37%.

The index fell 0.83% on Wednesday, 0.49% on Tuesday and 0.21% on Monday.

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