AMC notes boosted on theater reopenings; United Airlines eyed as furloughs outlined

By James McCandless

San Antonio, Sept. 2 – Entertainment and travel names, two sectors that have been among the hardest hit during the pandemic, remained in the distressed debt spotlight on Wednesday.

AMC Entertainment Holdings, Inc.’s notes were boosted as the company prepares to have 70% of its locations open this week.

Elsewhere, United Airlines Holdings, Inc.’s issues varied after outlining thousands of furloughs it expects to make if federal aid is not renewed.

Sector peer American Airlines Group Inc.’s paper spent the session rising.

In the oil and gas space, Denbury Resources, Inc.’s notes were positive after the company won final approval to access its debtor-in-possession financing.

As oil futures were pushed lower, Whiting Petroleum Corp.’s issues followed suit while Occidental Petroleum Corp.’s and Antero Resources Corp.’s paper saw better levels.

Telecom services name Intelsat SA’s notes diverged as the name seeks to make an acquisition in bankruptcy.

Wireline communicator Frontier Communications Corp.’s notes ended with mixed results.

AMC improves

AMC’s notes were boosted throughout the day, traders said.

The 12% notes due 2026 gained 2½ points to close at 39½ bid. The 10½% notes due 2025 tacked on 2½ points to close at 90¾ bid.

About $38 million of the two notes combined changed hands.

Toward the end of the day on Tuesday, the Leawood, Kan.-based movie theater operator announced that it expects to have 70% of its locations open by Thursday.

About 140 theaters are expected to be operational.

After an extended period of closures and lost revenues during the coronavirus pandemic, the company has been reopening locations throughout August.

“Everything depends on getting Covid under control,” a trader said. “But they need to make some money. They can’t just keep limping along.”

AMC said on Monday that it sold nine theaters in Latvia, Lithuania and Estonia to UP Invest for $77 million.

Airlines in focus

Elsewhere, United Airlines’ issues varied in direction, market sources said.

The 5% senior notes due 2024 fell 1 point to close at 90½ bid. The 4¼% senior notes due 2022 rose 2 points to close at 94 bid.

Amid the Wednesday activity, news broke that the Chicago-based carrier is expecting to furlough 16,370 workers when the federal government’s payroll aid package expires.

The program is expected to cease in October unless a second round of aid is passed, though negotiations have hit a wall.

On Monday, the company garnered positive headlines after announcing that it would be scrapping its $200 booking change fee, leading other major airlines to do the same.

The sector remains weak as demand remains subdued.

Previously, $25 billion in aid was distributed in March when coronavirus-related travel restrictions were implemented.

Fort Worth-based sector peer American Airlines’ paper spent the session rising.

The 5% senior notes due 2022 picked up 2 points to close at 67¾ bid. The 11¾% senior notes due 2025 moved up ½ point to close at 97¾ bid.

Denbury up

In the oil and gas space, Denbury Resources’ notes were positive, traders said.

The 7¾% notes due 2024 advanced by ½ point to close at 51 bid.

On Tuesday, the Plano, Tex.-based independent oil and gas producer received final court approval to obtain $615 million in debtor-in-possession financing from its existing lenders, Prospect News reported.

The DIP loan will mature on July 30, 2021.

Interest will accrue at Libor plus 300 basis points to 400 bps.

Also on Tuesday, the company’s plan of reorganization was unanimously accepted by two of four voting creditor and interest holder classes.

Specifically, all 481 holders of $1,415,160,049 in second-lien notes claims and all 107 holders of $218.06 million in convertible notes claims voted to accept the plan.

Oil names differ

In the oil sector, West Texas Intermediate crude oil futures for October delivery sunk $1.25 to finish at $41.51 per barrel.

North Sea Brent crude oil futures for November delivery settled at $44.43 per barrel after a $1.15 dip.

Denver-based producer Whiting Petroleum’s issues moved on the same path as oil futures.

The 6¼% senior notes due 2023 declined by 1 point to close at 23 bid. The 6 5/8% senior notes due 2026 gave back ½ point to close at 23½ bid.

Houston-based E&P Occidental Petroleum’s paper saw better levels.

The 2.9% senior notes due 2024 grabbed ½ point to close at 92¾ bid. The 2.7% senior paper due picked up ½ point to close at 98¾ bid.

Antero Resources, another Denver-based producer, saw its notes lifted by the session’s end.

The 5 5/8% senior notes due 2023 rose ¾ point to close at 79¼ bid. The 5% senior notes due 2025 inched up ¼ point to close at 68½ bid.

Intelsat, Frontier diverge

Meanwhile, telecom services name Intelsat’s issues diverged, traders said.

Intelsat (Luxembourg) SA’s 8 1/8% senior notes due 2023 shot up 1¼ points to close at 5¾ bid. Intelsat Jackson Holdings SA’s 8% notes due 2024 shaved off ¼ point to close at 102 bid.

The Luxembourg-based satellite operator announced its plans to draw down on its $1 billion DIP financing to fund its acquisition of the commercial aviation business of Gogo Inc. for $400 million.

The company plans to combine that with cash on hand to supplement the financing.

The acquisition, which is expected to close before the end of first-quarter 2021, has the approval of stakeholders and the bankruptcy court.

Norwalk, Conn.-based wireline name Frontier’s paper ended with mixed results.

The 10½% senior notes due 2022 held level to close at 43 bid. The 11% senior paper due 2025 dipped 1 point to close at 43 bid.

© 2015 Prospect News.
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