AMC notes improve after more vaccine news; United Airlines eyed in travel sector

By James McCandless

San Antonio, Nov. 23 – Starting off a week that will be cut short by the Thanksgiving holiday, the distressed debt space again focused on entertainment and travel names.

AMC Entertainment Holdings, Inc.’s notes improved as more news about a potential coronavirus vaccine sparked optimism.

Sector peer Cinemark Holdings, Inc.’s issues were also carried higher.

Meanwhile, in the travel space, United Airlines Holdings, Inc.’s paper varied in direction as the company preps an equity raise.

Air carrier American Airlines Group Inc.’s notes gained.

As oil futures were pushed higher, Transocean Ltd.’s and Antero Resources Corp.’s issues followed while Occidental Petroleum Corp.’s paper diverged.

Elsewhere, L Brands, Inc.’s and Nordstrom, Inc.’s notes were lifted.

AMC, Cinemark gain

AMC’s notes spent the session improving to start off the week, traders said.

The 10½% notes due 2025 rose 2¾ points to close at 77½ bid. The 12% notes due 2026 grabbed 3¾ points to close at 21½ bid.

The Leawood, Kan.-based movie theater chain’s bonds were pushed higher after news broke that drug producer AstraZeneca had a Covid-19 vaccine that was “highly effective.”

The pharma name is the third company to announce a potential vaccine in the last few weeks, following Pfizer and Moderna.

After months of closures of its locations to thwart the spread of the disease, AMC has conducted systematic reopenings over the last few months.

At the end of October, AMC had reopened about 90% of its theaters.

The theater space was also emboldened by news that industry peer Cineworld had received a cash infusion of $750 million to continue operations.

“There is a new positivity that is driving the paper up in this space,” a trader said.

Recently, the company warned that without that kind of capital injection, that it would run out of money by the end of the year.

Plano, Tex.-based sector peer Cinemark’s issues were also carried higher.

The 5 1/8% senior notes due 2022 gained ¼ point to close at 95¼ bid. The 4 7/8% senior notes due 2023 moved up ½ point to close at 94 bid.

Airlines in focus

Meanwhile, in the travel space, United Airlines’ paper varied in direction, market sources said.

The 5% senior paper due 2024 held level to close at 96¾ bid. The 4¼% senior notes due 2022 tacked on 1¾ points to close at 100 bid.

On Monday morning, the Chicago-based commercial airline company announced that it plans to raise about $1 billion in new capital.

In a filing with the Securities and Exchange Commission, the company said that it would sell 25.3 million shares.

The company, along with others in the industry, has seen positive pushes with the recent series of announcements concerning potential vaccines.

Before then, United Airlines had seen increasing negative pressure as negotiations over payroll stimulus remains stymied.

In the meantime, furloughs have been enacted throughout the sector.

Fort Worth-based air carrier American Airlines’ notes gained.

The 5% senior notes due 2022 improved by 2 points to close at 80 bid. The 11¾% senior notes due 2025 added 2 points to close at 110 bid.

Oil names higher

As oil futures were pushed higher, distressed energy names mostly followed, traders said.

West Texas Intermediate crude oil futures for January delivery reached up 64 cents to settle at $43.06 per barrel.

North Sea Brent crude oil futures for January delivery finished at $46.06 per barrel after a $1.10 boost.

Steinhausen, Switzerland-based contract driller Transocean’s issues moved the same way as futures.

The 7½% senior notes due 2031 moved up 3 points to close at 24½ bid. The 8 3/8% senior notes due 2021 rose 1½ points to close at 70¼ bid.

Denver-based independent oil and gas producer Antero Resources’ paper also followed the overall trend.

The 5 5/8% senior notes due 2023 were lifted 3¼ points to close at 89½ bid. The 5% senior paper due 2025 shifted up 2 points to close at 78 bid.

Houston-based producer Occidental Petroleum’s notes diverged.

The 2.9% senior notes due 2024 gained 1½ points to close at 92¾ bid. The 2.7% senior notes due 2022 closed level at 98 bid.

L Brands, Nordstrom lifted

Elsewhere, retailer L Brands’ issues were lifted by the end of the day, market sources said.

The 6¾% senior notes due 2036 tacked on ½ point to close at 107½ bid. The 5¼% senior notes due 2028 shot up 2¾ points to close at 105 bid.

Last week, the Columbus, Ohio-based specialty retail company reported better-than-expected earnings for the third quarter.

The company showed earnings $1.13 per share and revenues of $3.06 billion, both exceeding expectations.

For its Victoria’s Secret segment, the company reported a 4% improvement in comparable-store sales while direct business sales rose by 42%.

Sales at the Bath & Body Works division improve by 55%.

Seattle-based department store chain Nordstrom’s paper finished better.

The 5% senior notes due 2044 garnered 2½ points to close at 85¼ bid.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.