AMC paper lower; Transocean flat after decline; Talen edges up; Diamond Sports improves

By Cristal Cody

Tupelo, Miss., Jan. 25 – AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Ca/CCC-) fell in strong trading over Tuesday’s session after ending Monday weaker.

The notes were down 5/8 point on $26 million of volume after trading Monday 1 point lower on $20 million of supply.

The issue has been the most active distressed issue seen in the secondary market over the past two days, a source said.

The financial markets slipped early Tuesday with stock indices down over 2% before showing improvement by the close. The Nasdaq was down 2.99% by mid-morning and ended the day off 2.28%.

The iShares iBoxx High Yield Corporate Bond ETF fell 25 cents, or 0.29%, to $85.10.

Measured market volatility has climbed with focus on Russia’s military presence at the Ukraine border and the deployment of U.S. troops and the Federal Reserve’s monetary policy statement due on Wednesday.

The Chicago Board Options Exchange’s CBOE Volatility index was up 4.21% by the close on Tuesday to 31.16. The VIX sat at the 17 range at the start of the month.

Oil recovered after sliding over $1.50 on Monday.

West Texas Intermediate crude oil benchmark futures for March deliveries settled Tuesday $2.29 higher at $85.60 a barrel.

In the distressed energy space, Transocean Inc.’s 11½ senior guaranteed notes due 2027 (Caa3/CCC+) also have been strongly traded on Monday and Tuesday, a source said.

The notes were flat on $21.5 million of volume after shedding 2¼ points on $7.4 million of trading the prior day.

Talen Energy Supply LLC’s 10½% senior notes due 2026 (Caa2/CCC/B-) recovered ½ point in thin activity following a 2-point-decline on Monday on the heels of downgrades from S&P Global Ratings and Moody’s Investors Service.

Elsewhere, Diamond Sports Group LLC’s secured and unsecured notes traded 1½ points to 2 points higher over the day.

Meanwhile, R&F Properties (HK) Co. Ltd. is the first default from the emerging markets this year after completing a distressed exchange, S&P said in a news release on Monday.

Since the beginning of the fourth quarter, 43% of total global defaults have come from the homebuilders and real estate sector, S&P said.

AMC notes drop

AMC’s 10% senior secured second-lien notes due 2026 (Ca/CCC-) were quoted down 5/8 point at 92 5/8 bid by the close on $26 million of secondary action on Tuesday, a source said.

The notes fell 1 point on Monday on $20 million of paper traded.

AMC’s stock, well off the 52-week high of $72.67, fell 3.61% to $16.02 after declining over 7% in the prior session.

The Leawood, Kan.-based movie theater owner’s bonds have been heavily traded in January following reports the company is considering refinancing debt in 2022.

Transocean flat

Transocean’s 11½% senior guaranteed notes due 2027 (Caa3/CCC+) went out unchanged at par in strong trading on Tuesday, a source said.

The notes saw $21.5 million of secondary activity.

The Vernier, Switzerland-based offshore driller’s notes declined 2¼ points in the prior session on $7.4 million of volume.

Talen issue improves

Talen’s 10½% senior notes due 2026 (Caa2/CCC/B-) added ½ point to trade at 46½ bid in thin action on Tuesday, according to a market source.

The notes fell 2 points at the week’s start.

S&P downgraded Talen’s secured debt while affirming its unsecured paper on Tuesday, while Moody’s lowered The Woodlands, Tex., and Allentown, Pa.-based energy company’s ratings on Monday following the closing of Talen’s $848 million first-lien financing.

Moody’s said $393 million is left of the financing and is being held by Talen as cash on hand and as the company’s current main source of liquidity.

Fitch Ratings also downgraded the company earlier in the month.

Diamond Sports higher

Diamond Sports’ 5 3/8% senior secured notes due 2026 (Caa1/CCC) jumped 2 points to 46¾ bid on $2 million of issues traded on Tuesday, a source said.

The company’s 6 5/8% senior unsecured notes due 2027 (Ca/CC) also improved 1½ points to 26½ bid.

The issue saw $3 million of volume during the session.

The Chesapeake, Va.-based sports broadcast group’s notes are trading about 3 points to over 7 points weaker since announcing Jan. 13 that it and parent Sinclair Broadcast Group Inc. reached a $600 million new money financing and debt exchange of its 5 3/8% senior secured notes due 2027 and 12¾% notes due 2026.

S&P downgraded the company earlier in January and said it considers the debt exchange tantamount to a default.

Distressed returns soft

Distressed index returns were soft at the start of the week.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return was minus 0.78%, improved from minus 1.08% on Friday.

Month- and year-to-date index returns declined to minus 1.13% versus minus 0.35% on Friday.

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