AMC secured notes move higher; Avaya bonds shed over 3 points; Bausch Health improves

By Cristal Cody

Tupelo, Miss., Aug. 12 – A few names stood out in distressed secondary action on Friday in otherwise mostly light trading.

AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) added 1½ points over the day and were ending the week 2¾ points higher.

The issue was among the most active distressed names seen during the session on $17 million of volume.

Avaya Inc.’s 6 1/8% senior secured notes due 2028 (Caa2/CCC-/CCC) shed 3¾ points by the afternoon on strong secondary activity and were ending the week more than 13 points lower.

Market tone heading into the weekend was improved with stock indices up more than 1%, including the Nasdaq closing 2.09% better.

The iShares iBoxx High Yield Corporate Bond ETF rose 70 cents, or 0.89%, to $78.94.

Measured market volatility waned with the CBOE Volatility index down 3.32% at 19.53.

Bausch Health Cos. Inc.’s notes improved on Friday in mostly light secondary action totaling about $4 million, with the notes up 1¾ points to over 2 points on the day.

A few sectors are flashing distressed signs as the summer winds down, including health care, technology and retail spaces, according to a BofA Securities Inc. research note on Friday.

Distressed tech names include Avaya Inc. and Diebold Nixdorf Inc., while the retail space has seen a bankruptcy from Revlon Inc. and a distressed debt exchange from drug retailer Rite Aid Corp. in June.

Distressed health care names include Bausch, Endo International plc and Envision Healthcare Corp., according to the note.

AMC notes higher

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) added 1½ points to trade at 86½ bid by the day’s end, a market source said.

The issue was among the most active distressed names seen over the session with $17 million of paper traded.

AMC’s notes were ending the week 2¾ points higher.

The Leawood, Kan.-based movie theater owner and gold and silver mine investor last week reported improved second-quarter earnings and revenue and plans for a special dividend.

Avaya notes drop

Avaya’s 6 1/8% senior secured notes due 2028 (Caa2/CCC-/CCC) shed 3¾ points to 43¼ bid by the close, a source said.

Trading was strong with $8 million of volume on Friday.

The notes were down more than 13 points on the week following the company’s report of additional weak preliminary third-quarter results on Tuesday.

Moody’s Investors Service, S&P Global Ratings and Fitch Ratings downgraded the Durham, N.C.-based technology company, citing the third-quarter results from Avaya Holdings Corp., internal investigations by its audit committee and delayed financial reporting.

Bausch paper improves

Bausch Health’s notes made gains over Friday’s session with the paper up 1¾ points to over 2 points on about $4 million of secondary volume, a source said.

Bausch Health Americas, Inc.’s 9¼% notes due 2026 (Caa2/CCC/B-) were quoted 1¾ points better at 72¾ bid on $1 million of paper changing hands.

The Laval, Quebec-based pharmaceutical company released its second-quarter results on Tuesday, reporting revenue was down 6%, while losses improved to $145 million from $595 million of losses a year ago.

Distressed index up

S&P U.S. High Yield Corporate Distressed Bond index total returns softened but remained positive on Thursday.

One-day returns were 0.8%, compared to 1.05% on Wednesday, minus 0.18% on Tuesday and 0.79% on Monday.

Month-to-date total returns rose to 3.81% from 2.99% on Wednesday, 1.92% on Tuesday and 2.1% at the week’s start.

Year-to-date total returns improved on Thursday to minus 17.64% from minus 18.3% on Wednesday, minus 19.15% on Tuesday and minus 19% on Monday.

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