AMC notes slide; Diebold Nixdorf bonds perk up; Rite Aid rises, CDS spreads move out

By Cristal Cody

Tupelo, Miss., Oct. 20 – AMC Entertainment Holdings, Inc.’s notes gave back about 2¾ points to 6½ points across the company’s capital structure in strong secondary trading on Thursday.

The 10% senior secured second-lien notes due 2026 (Caa3/CCC-) were down more than 5 points.

Secondary action in the notes climbed on Thursday after AMC announced it closed on a new bond priced last week and filed an 8-K filing with the Securities and Exchange Commission that gave details of the indenture and guarantee agreement.

Diebold Nixdorf Inc.’s notes also racked up secondary interest after the ATM manufacturer announced early in the session that it entered into an agreement with key financial stakeholders to refinance debt with near-term maturities and provide the company with $400 million in additional financing.

Tone was mixed with stock indices lower on the day and volatility down.

The iShares iBoxx High Yield Corporate Bond ETF fell 40 cents, or 0.55%, to $71.80.

The CBOE Volatility index dropped below 30 and went out down 2.54% at 29.98.

In other distressed paper, Rite Aid Corp.’s 8% senior secured notes due 2026 (B3/CCC-/BB-) traded ½ point better on the day, while the drugstore chain’s credit default swap spreads eased more than 450 basis points this week.

AMC down

AMC’s paper was among the most active distressed names seen trading on Thursday on more than $30 million of volume, a source said.

The 10% senior secured second-lien notes due 2026 (Caa3/CCC-) fell nearly 3 points on $16.73 million of trading action and went out more than 5 points lower at 48¾ bid on another $17.8 million of paper traded.

AMC’s 7½% notes due 2029 (Caa1/B-) also declined 2¾ points during the session to 66½ bid on $16.75 million of supply. The notes carried a 16.15% yield.

AMC sold $950 million of the first-lien notes on Feb. 2, 2022 at par.

The company’s bonds have been soft since an AMC subsidiary started marketing and sold $400 million of new 12¾% five-year senior secured notes (B3/B) in the prior week.

AMC and indirect subsidiary Odeon Finco plc priced the guaranteed issue on Oct. 14 at 92 to yield 15.066%.

Odeon announced Thursday that it closed on the offering and will use the proceeds to repay in full existing Odeon Cinemas Group Ltd. term loan facilities.

AMC chairman and chief executive officer Adam Aron said in the release the transaction reduces the company’s principal debt by $106 million and takes the total principal debt reduction in 2022 to $179 million.

The Leawood, Kan.-based movie theater owner and gold and silver mine investor’s common stock closed up 3.93% at $6.35, well off the 52-week high of $45.95.

Diebold Nixdorf higher

Diebold Nixdorf’s 8½% senior notes due 2024 (Ca/CCC-) picked up 3 points to head out at 51 bid in active trading on Thursday, a market source said.

Secondary volume totaled $7.93 million.

In the announcement Thursday, Diebold Nixdorf also revised its full-year 2022 revenue forecast lower to $3.5 billion from $3.55 billion to $3.75 billion.

The Hudson, Ohio-based financial and retail technology company expects the new agreement with the majority of holders of its term loans and secured notes due 2025 and unsecured notes due 2024 to be completed before Dec. 31.

Rite Aid up

Rite Aid’s notes improved in fairly active secondary activity on Thursday, a market source said.

The pharmacy chain’s 8% senior secured notes due 2026 (B3/CCC-/BB-) rose ½ point to 63¾ bid in steady trading totaling more than $8 million over the day.

Meanwhile, Rite Aid’s CDS spreads moved out 459 bps this past week ended Wednesday to 3,715 bps, a Moody’s Investors Service report said.

The Camp Hill, Pa.-based drug retailer’s CDS spreads were 120 bps softer in the previous week and 796 bps wider the week prior.

Distressed returns decline

S&P U.S. High Yield Corporate Distressed Bond index one-day returns declined on Wednesday to minus 0.96% from 0.43% on Tuesday and 0.58% on Monday.

Month-to-date total returns dipped to minus 0.6% on Wednesday from 0.36% on Tuesday and minus 0.07% on Monday.

Year-to-date total returns widened to minus 26.65% in the prior session from minus 25.95% on Tuesday and minus 26.26% on Monday.

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