Altice France moves lower; Ardagh distressed paper under pressure; AMC bonds soften

By Cristal Cody

Tupelo, Miss., April 16 – Altice France Holding Restricted Group’s paper traded heavily on Tuesday, going out down more than 1½ points.

The 5½% senior secured notes due 2028 (Caa1/CCC+) declined 1 3/8 points on $17 million of volume.

Ardagh Group SA’s notes remained pressured after sliding on Monday on the company’s plans to refinance up to $1 billion of secured debt.

The 5¼% senior notes due 2027 (Caa1/CCC/CCC) gave back another 1½ points over the day after declining over 5 points the previous day.

Stocks mostly ended lower but pulled back from Monday’s losses after stronger March retail sales surprised analysts. The S&P 500 index fell 0.21%, while the Nasdaq was off 0.12%.

The iShares iBoxx High Yield Corporate Bond ETF was down 25 cents, or 0.33%, to $75.68.

“The CDX was a little bit lower, but not at the lows,” a source said. “Stocks are basically mixed. It was a volatile day, up and down.”

Treasury yields continued to move up.

The 10-year Treasury note yield, which jumped 13 basis points to 4.62%, its highest level since November, on Monday, rose another 3 bps on Tuesday to 4.66%.

“There’s a lot of consternation out there given the way the market’s been trading the last two or three days,” a source said on Tuesday. “We’re off the wides on Treasuries. There was a little bit of flight-to-quality bid to the Treasury market in the middle of the afternoon, but that seems to have faded. We’re still off about 6 basis points on the day in terms of the 10-year note.”

Junk new issues and distressed paper mostly were under pressure over the session with bonds widely down, sources reported.

Overall volume was pegged more in the “medium” category and felt light in junk-rated paper, a source said.

Distressed trading topped $180 million by the end of the day, another source said.

“Secondary-wise was a little bit on the light side today,” a trader said. “There was a little bit of selling early. The cash market was pretty quiet – no big sell-off.”

The secondary space was awash in BWICs during the session.

“We had probably $7 billion in BWICs versus $2 billion in OWICs,” a source said, attributing the trades to overall market weakness in Treasuries and equities.

Volatility subsided over the day with the CBOE Volatility index down more than 4% to 18.40 after climbing over 27% in the prior two sessions.

AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) dropped over 1½ points by the end of the day on $8 million of paper traded.

Meanwhile, the amount of U.S. corporate defaulted debt soared to $33.2 billion in the first quarter, up 53% from the same quarter in 2023, S&P Global Ratings said Tuesday.

The increase primarily was driven by telecommunication defaults, which added $12.8 billion to the volume of defaulted debt in March.

Global defaults in March slowed to eight from 15 in February but remain above the 10-year average, according to the S&P report.

Year to date, global corporate defaults total 37, three fewer than in the same period last year but still higher than the 10-year average of 27.

Altice notes mixed

Altice France SA’s 8 1/8% senior secured notes due 2027 (Caa1/CCC+) slid 1 5/8 points to 75¾ bid on $25 million of volume in one of the company’s most active tranches traded on Tuesday, a source said.

The bonds have dropped around 3 points since Friday with Altice reportedly undergoing debt negotiation talks.

The 5½% senior secured notes due 2028 (Caa1/CCC+) declined 1 3/8 points to 66 7/8 bid on $17 million of volume over the day.

Altice France’s 5½% senior secured notes due 2029 (Caa1/CCC+) fell 1½ points to 65 bid on $23 million of action.

The company’s other paper edged higher in light trading.

Altice France Holding SA’s 10½% senior notes due 2027 (Ca/CCC-) rose ½ point to 40½ bid.

Altice’s 6% senior notes due 2028 (Ca/CCC-) also traded up less than ½ point to a 31 bid handle.

The Paris-based telecommunications company’s bonds sank in March after Altice France lowered its guidance and highlighted potential haircuts for debt holders to reduce its leverage.

Ardagh declines

Ardagh Packaging Finance plc’s 5¼% senior notes due 2027 (Caa1/CCC/CCC) remained under pressure on Tuesday and softened to around 47 bid, 48 offered, sources reported.

The notes were trading down 1½ points to around 47½ bid in volume that totaled $12 million by the close.

“Ardagh was under a little bit of pressure,” one source said. “They’re kind of stuck in the low 40s. They were trading in the mid-50s; so, they’re down about 10 points in three days.”

The bonds traded on Monday down more than 4 to 5 points and went out at 51 bid.

The weakness came after Ardagh Group on Monday reported its plans to redeem its secured notes due in 2025 and that subsidiary Ardagh Investments Holdings Sarl has a new senior secured credit facility with Apollo Capital Management, LP-managed investment funds and entities.

The Luxembourg-based glass and metal packaging producer will release first-quarter earnings results on April 25.

AMC lower

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) traded down more than 1½ points to the 72 bid area on Tuesday in active supply, a source said.

The issue saw $8 million traded over the day.

AMC reported in March that it agreed to sell up to $250 million of class A common shares with proceeds to be used to bolster liquidity, to repay, refinance, redeem or repurchase its existing debt and for general corporate purposes.

Settlement of the at-the-market offering is expected May 28.

The Leawood, Kan.-based movie theater company raised more than $865 million from equity sales in 2023, including $350 million in the fourth quarter.

Distressed returns drop

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns started the week lower at minus 0.52%, down from minus 0.39% on Friday and from 0.58% of positive returns in the same session a week ago.

Month-to-date total returns dropped to negative 1.76% on Monday from negative 1.24% on Friday and minus 0.68% in the week-ago session.

Year-to-date total returns moved down to 0.34% at the start of the week from 0.87% ahead of the weekend and from 1.44% the same day last week.

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