AMC notes climb after strong second quarter; Rite Aid continues rally; Qurate Retail up

By Cristal Cody

Tupelo, Miss., Aug. 8 – AMC Entertainment Holdings, Inc.’s bonds traded about 1 3/8 points to 1¾ points higher Tuesday after the company posted strong second-quarter results.

Trading was active on more than $20 million of notes changing hands.

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) were 1¾ points higher by the close on more than $10 million of activity.

Stocks shifted down Tuesday after posting gains Monday, while volatility was slightly higher on the day as earnings reports deluged the market.

The Nasdaq dropped 0.79%.

The CBOE Volatility Index increased 1.4% to 15.99.

The iShares iBoxx High Yield Corporate Bond ETF rose 16 cents, or 0.21%, to $74.95.

Rite Aid Corp.’s 8% senior secured notes due 2026 (Caa3/CCC-/B) continued to climb Tuesday. The notes added 1 point from where the issue was last seen Monday, a source said.

The notes rallied more than 3 points at the week’s start.

Home shopping network owner Qurate Retail Inc.’s 8½% senior notes due 2029 (Caa2/CCC-) held on to Monday’s gains and were bumped ½ point higher Tuesday.

Earnings lift AMC bonds

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) picked up 1 3/8 points in active trading Tuesday following the release of the company’s second-quarter results, a source said.

The bonds were quoted at 69 1/8 bid on more than $10 million of volume during the session.

The issuer’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) were 1¾ points better at 69¾ bid on more than $10 million of activity.

AMC on Tuesday reported second-quarter revenue climbed 15.6% from the same quarter a year ago to $1.35 billion.

Profit totaled $8.6 million, compared to a loss of $121.6 million in the second quarter of 2022.

AMC said it was its strongest second quarter in four years.

The company also reported it raised around $34 million in cash through the sale of its APE units during the second quarter.

AMC said in its 10-K regulatory filing Tuesday that it is at an impasse until the Delaware Court of Chancery lifts a status quo order regarding a shareholder lawsuit settlement after the court denied the settlement in July.

AMC previously reported the Delaware Court of Chancery on July 21 denied its settlement plans in a shareholder lawsuit brought by Allegheny County Employees’ Retirement System over its issuance of preferred stock.

The company filed an addendum to the stipulation on July 22 to address the issues raised by the court and requested approval with the revised release. After a July 24 response from the court, AMC said it filed additional requested information to the court on July 26.

AMC said in the 10-K filing that the court’s status quo order remains in place.

“Unless and until the court lifts the status quo order, the company will not proceed with filing the amendment to the company’s certificate of incorporation to effect the charter amendment proposals,” AMC disclosed. “Nor will the company make the litigation settlement payment contemplated by the settlement stipulation.”

The Leawood, Kan.-based movie theater owner’s common stock (NYSE: AMC) closed 0.59% lower at $5.09 in heavy trading Tuesday totaling around 29 million shares.

AMC’s preferred stock (NYSE: APE) declined 2.26% to $1.73 in light volume.

Rite Aid gains

Rite Aid’s 8% senior secured notes due 2026 (Caa3/CCC-/B) went out Tuesday at 59 bid in mostly light trading, according to a market source.

The notes were last seen Monday up 3 1/8 points at 58 bid.

The bonds have added about 9 points since Thursday.

The Camp Hill, Pa.-based drugstore chain’s stock (NYSE: RAD) moved up 4.04% Tuesday to $2.83 in lighter volume totaling about 8 million shares.

On Monday, the stock rose 1.49% on more than 20 million shares traded.

Qurate improves

Qurate Retail’s 8½% senior notes due 2029 (Caa2/CCC-) went out ½ point better Tuesday at 39½ bid, a market source said.

The issue improved 1½ points on Monday.

The West Chester, Pa.-based home shopping network company’s stock (Nasdaq: QRTEA) dropped 1.7% to 90 cents Tuesday in active trading.

Distressed returns gain

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns finished Monday at 0.35%.

Returns declined from 0.58% on Friday but were improved from 0.5% a week ago.

Month-to-date total returns rose to 0.2% on Monday from minus 0.15% on Friday.

Year-to-date distressed total returns improved Monday to 15.16% versus 14.76% on Friday and 14.94% in the week-ago session.

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