DISH mostly declines after exchange launch; Spirit Airlines plunges; AMC paper softens

By Cristal Cody

Tupelo, Miss., Jan. 16 – DISH Network Corp.’s distressed bonds mostly sank further Tuesday in heavy secondary supply that put the name in the top of the list of most active high-yield issuers traded on more than $165 million of activity.

DISH’s 7¾% notes due 2026 (Caa2/CC) fell over 2½ points as trading soared past $53 million in the tranche after parent EchoStar Corp. announced Tuesday that it launched exchange offers for the issue, among other tranches.

Meanwhile, Spirit Airlines Inc.’s 8% senior secured notes due 2025 (B2//) plunged over 15 points after a federal judge blocked the company’s $3.8 billion merger with JetBlue Airways Corp.

Trading climbed past $40 million over the session.

Spirt Airlines’ stock closed down nearly 50%.

Overall market tone was weak with stocks under pressure and measured market volatility ramping higher.

The iShares iBoxx High Yield Corporate Bond ETF dropped 49 cents, or 0.63%, to $77.21.

AMC Entertainment Holdings, Inc.’s bonds also opened the short holiday week under continued selling pressure after edging lower Friday.

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) fell over 2½ points in the company’s most active tranche.

DISH remains pressured

DISH DBS Corp.’s 7¾% senior notes due 2026 (Caa2/CC) shed over 2½ points to just under 56¼ bid and with a 36.12% yield Tuesday, a source said.

Trading soared to $53.9 million by the close.

DISH’s 5 1/8% senior notes due 2029 (Caa2/CC) gave back 1½ points to finish the session at a quote of 36 bid and a 29.65% yield. Secondary supply totaled over $44 million.

The 5¼% senior secured notes due 2026 (B2/B-) also dropped 3 1/8 points to head out at 76 bid and a 15.9% yield on $17.3 million of secondary volume Tuesday.

DISH bonds came under heavy selling pressure last week after the Englewood, Colo.-based satellite cable company’s announcement that it would move its unencumbered wireless spectrum licenses to the newly formed subsidiary EchoStar Wireless Holding LLC and a subsequent downgrade from S&P Global Ratings as the asset shuffle lowers the recovery prospects of the unsecured debt.

Creditors are exploring legal options, including labeling the asset transfer a technical default.

On Tuesday, EchoStar announced that indirect subsidiary DISH DBS Issuer LLC commenced exchange offers and consent solicitations for the 5 7/8% senior notes due 2024, the 7¾% senior notes due 2026, the 7 3/8% senior notes due 2028 and the 5 1/8% senior notes due 2029.

The maximum participant amount of DBS notes that will be issued to eligible holders in the exchange is $3 billion.

The exchange offer expires Feb. 12.

S&P Global Ratings downgraded the senior notes further on Tuesday following the exchange announcement.

Spirit dives lower

Spirit Airlines’ 8% senior secured notes due 2025 (B2) slid over 15 points Tuesday to a 59 bid handle and a yield of 43.71% in a swift reaction following the federal judge’s ruling against the JetBlue takeover, a source said.

Secondary volume totaled $43.52 million by the close.

The bonds were trading with a 72 bid handle back in the week of the Thanksgiving Day holiday.

In November, Moody’s Investors Service downgraded the company and the bonds issued by subsidiaries Spirit IP Cayman Ltd./Spirit Loyalty Cayman Ltd. based on expected operations losses through 2024.

The justice department had moved against JetBlue’s acquisition of the Miramar, Fla.-based low-cost airline based on antitrust laws.

Spirit Airlines’ stock (NYSE: SAVE) plunged 47.09% to end Tuesday at $7.92.

AMC bonds decline

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) fell over 2½ points to a 77 bid handle and a 22.64% yield on Tuesday, a source said.

While AMC’s other notes also softened, the 10% issue was the most active during the session on $16.25 million of trading supply.

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) declined more than 1¾ points to a 65 bid handle on $2.3 million of volume over the session. The yield was 18.21%.

The Leawood, Kan.-based movie theater owner’s stock (NYSE: AMC) also softened and closed down 7.7% at $4.21.

Distressed returns down

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns finished Friday lower at 0.16%, down from 0.6% in the previous session.

Month-, quarter- and year-to-date total returns wrapped the prior week at minus 2.21%, slightly improved from negative 2.37% on Thursday but down from a positive 0.21% at the week’s start.

The distressed index one-year total return was 13.79% on Friday.

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