AMC Entertainment, AerCap bonds jump; Hertz, Transocean, Occidental Petroleum improve

By Cristal Cody

Tupelo, Miss., Jan. 7 – Distressed paper saw several gains in the entertainment, travel and energy spaces on Thursday.

AMC Entertainment Holdings, Inc.’s bonds climbed in back-to-back sessions, a source said.

The theater owner’s 10½% first-lien secured notes due 2025 (Caa2/CCC) jumped 6 points to 79 bid after rising 3 points on Wednesday.

Aircraft leasing company AerCap Holdings NV’s bonds also were trading stronger with the 3.23% notes due 2065 going out up 1¾ points at 71 bid, a source said.

Meanwhile, car rental operator Hertz Corp.’s notes recovered some losses from Wednesday’s session.

The company’s 5½% senior notes due 2024 traded up 1½ points to 52¾ bid, a market source said.

The notes shed 2¾ points during Wednesday’s session.

In the retail space, Bed Bath & Beyond Inc.’s 5.165% notes due 2044 (B1/B+) were among the day’s decliners with the notes quoted down 1.1 points at 86 1/8 bid, according to a market source.

Markets shrug off siege

The siege on the U.S. Capitol on Wednesday by supporters of president Donald Trump that left four people dead was mostly ignored by the financial markets, sources note.

“Even with all the turmoil, long-duration Treasury yields moved well above 1%, suggesting little fear among investors,” Confluence Investment Management strategists said in a report on Thursday. “Fiscal support and an accommodative Fed overcome political turmoil.”

Stocks were stronger across the board with the S&P 500 closing up 1.48% and the Nasdaq 1.89% higher on growing expectations of additional Covid-19 stimulus funding after Joe Biden is inaugurated as U.S. president on Jan. 20.

The iShares iBoxx High Yield Corporate Bond ETF finished Thursday 25 cents, or 0.29%, better at 87.24.

The S&P U.S. High Yield Corporate Distressed Bond index ended Wednesday up 0.74% with a month- and year-to-date total return of 1.67%.

Economic data released on Thursday was improved. The Labor Department reported that initial unemployment claims for the week ended Jan. 2 totaled 787,000, beating market forecasts of 800,000 claims.

Transocean, Occidental up

Elsewhere, North Sea Brent crude oil futures rose 22 cents to $54.52 a barrel over the day.

Offshore driller Transocean Ltd.’s distressed paper continued to gain in trading during the session, a source said.

The company’s 7½% senior notes due 2026 (C/CCC-), which traded Tuesday up 1¾ points at 48¾ bid, were quoted Thursday 1 point better at 49½ bid.

Occidental Petroleum Corp.’s 4.4% senior notes due 2046 (Ba2/BB-/BB) also rose 1¾ points during the session to head out at 89½ bid.

Chesapeake active

In other distressed trading, Chesapeake Energy Corp.’s 8% notes due 2027 improved to 5 3/8 bid on Thursday, a source said.

The notes were mostly flat on Wednesday at 5¼ bid after heavy trading on Tuesday in line with higher oil prices.

Chesapeake Energy filed Chapter 11 bankruptcy on June 28.

The company filed new documents in the bankruptcy case on Thursday, including a motion for an order authorizing the debtors to pay a $1.2 million cash settlement over environmental violations.

In addition, the company filed a notice of the new directors and officers of what will be the reorganized Chesapeake Energy.

Chesapeake plans to eliminate about $7 billion of debt under the reorganization.

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