Altice bonds continue downward streak; Michaels paper higher; AMC mixed, mostly lower

By Cristal Cody

Tupelo, Miss., March 27 – Distressed bonds from Altice France Holding Restricted Group moved lower on Wednesday following a downgrade from Moody’s Ratings.

The company’s notes traded down around 1¼ points to 3¼ points on more than $100 million of supply by the close, a source said.

Altice France Holding SA’s 10½% senior notes due 2027 (Caa2/CCC) gave back 1¼ more points by the time the dust settled on $18 million of volume.

The bonds have dropped about 35 points since the same session last week.

Secondary action continued to ramp up on Wednesday in distressed arts and crafts retailer Michaels Cos, Inc. following a positive earnings report in the prior session.

Michaels’ 7 7/8% senior notes due 2029 (Caa2/CCC-) added 2¾ points on $34 million of volume on Wednesday after going out Tuesday over 5 points stronger on $38 million of notes traded.

Market tone was strong over the session after softening in the prior two sessions.

Much of Tuesday’s trading weakness was “driven by positioning, people just taking some chips off the table,” a source said. “That was just squaring away positions ahead of the end of the first quarter, which ends Thursday.”

The second quarter officially will start on Monday when the bond markets reopen following the Good Friday holiday.

The S&P 500 index rose 0.86%, while the iShares iBoxx High Yield Corporate Bond ETF added 41 cents, or 0.53%, to $77.90.

The CBOE Volatility index decreased 3.47% to 12.78.

AMC Entertainment Holdings, Inc.’s notes traded flat to about 1½ points weaker in active supply over the day.

The 10% senior secured second-lien notes due 2026 (Caa3/CCC-) went out mostly unchanged but nearly 3 points lower on the week.

Altice bonds erode

Altice’s junk and distressed paper went out Wednesday down around 1¼ points to 3¼ points in continued heavy trading that topped over $100 million, a source said.

Altice France Holdings’ 10½% senior notes due 2027 (Ca/CCC) were off 1¼ points at 35½ bid on $18 million of volume.

The bonds have declined from 70½ bid, 71½ offered in the prior week.

Altice France Holdings’ 6% senior notes due 2028 (Ca/CCC) gave back 1 point to a quote of 26 bid on $9 million of activity on Wednesday.

The senior notes have dropped over 30 points from a week ago.

Altice France SA’s 5 1/8% senior secured notes due 2029 (Caa1/B-) also fell 3 points to 67 bid on $19 million of paper traded over the session.

Altice’s 5½% senior secured notes due 2029 (Caa1/B-) declined 2¼ points to hit 68¼ bid on $41 million of volume in the name’s most active tranche on Wednesday.

The 8 1/8% senior secured notes due 2027 (Caa1/B-) also dropped 3¼ points to 77½ bid on $23 million of trading.

Altice’s paper plunged from a week ago on the heels of weaker earnings results and reports the company has hired financial and legal advisers.

Moody’s said Wednesday it downgraded Altice and its senior unsecured and secured notes, reflecting a material increase in a probability of default and an “unsustainable capital structure.”

The telecommunications company is based in Paris.

Michaels paper rebounds

Michaels’ 7 7/8% senior notes due 2029 (Caa2/CCC-) climbed 2¾ points to 74¾ bid on $34 million of notes traded on Wednesday following a strong jump on Tuesday, a source said.

The bonds were quoted the previous day over 5 points better at 72 bid, 73 offered.

Michaels’ paper has climbed from where it traded Monday at 66½ bid, 67½ offered.

The Irving, Tex.-based arts and crafts retailer was taken private in 2021 by funds managed by Apollo Global Management, Inc. affiliates.

AMC bonds mixed

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) softened 1½ points to trade at 66 bid on $12 million of secondary supply on Wednesday, a source said.

The bonds have declined over 2 points since Monday.

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) went out mostly unchanged with a 75 bid handle on $11 million of volume but also were lower on the week.

The issue opened the week at around 78 1/8 bid.

The Leawood, Kan.-based movie theater company in February reported higher fourth quarter and fiscal 2023 revenue and improved net losses but has a heavy debt load with $5 million of debt payments due in 2024, $98 million due in 2025, $2.9 billion due in 2026 and $525 million due in 2027, according to a Wedbush Securities, Inc. note released Monday.

Distressed index edges up

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns made modest gains to minus 0.04% on Tuesday from negative 0.14% at the week’s start.

Month-to-date total returns widened on Tuesday to negative 0.33% versus negative 0.29% on Monday.

Year-to-date total returns declined to 2.28% from 2.32% at the start of the week.

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