Envision Healthcare notes higher after downgrade; Diebold Nixdorf recovers; AMC better

By Cristal Cody

Tupelo, Miss., May 3 – Distressed paper saw gains over the day as primary action thinned and market volatility fell ahead of the Federal Reserve’s rate decision due Wednesday.

Envision Healthcare Corp.’s 8¾% senior notes due 2026 (Ca/CC) improved 2 points in strong trading action on Tuesday after opening May down more than 6 points.

The pickup in the notes follows S&P Global Ratings’ downgrade of Envision during the session to SD and the notes to D after the company reported Friday that it entered into $2.6 billion of new senior secured first- and second-lien financing facilities.

Diebold Nixdorf Inc.’s 8½% notes due 2024 (Caa1/CCC) recovered 5½ points over the day after seeing a 2-point bump on Monday.

The bonds had dropped 10½ points ahead of the weekend.

Market tone over the day was observably better with stocks higher.

The iShares iBoxx High Yield Corporate Bond ETF closed up 41 cents to $78.64.

Measured volatility declined nearly 10% with the Chicago Board Options Exchange’s CBOE Volatility index off 9.55% and under 30 at the close at 29.25.

June oil prices were unchanged to lower.

West Texas Intermediate crude oil benchmark futures for November deliveries settled down $2.76 at $102.41 a barrel.

Also Tuesday, AMC Entertainment Holdings, Inc.’s first- and second-lien paper climbed ¼ point to over 1 point as the company prepares to post first-quarter results next week.

Envision notes improve

Envision Healthcare’s 8¾% senior notes due 2026 (Ca/D) picked up 2 points to hit 36½ bid in a busy session that saw $8 million of paper traded on Tuesday, a market source said.

The bonds opened May over 6 points weaker after going out on Friday at the 41.678 bid area.

The issue has steadily declined since September when it traded at the 90 bid range, but the notes remain well off the low of 19½ bid seen in April 2020.

S&P downgraded the Nashville-based health care company and hospital-based physician group and its bonds on Tuesday.

The downgrades follow Envision Healthcare’s announcement on Friday that it raised new financing at one of its subsidiaries and used the proceeds to repurchase portions of its outstanding first-lien term loan B, incremental term loan and notes at below par.

S&P said it views the transaction as a distressed exchange and tantamount to a default because the creditors received less than the principal amount originally promised.

Diebold Nixdorf gains

Diebold Nixdorf’s 8½% notes due 2024 (Caa1/CCC) jumped 5½ points to a quote of 73½ bid on $9 million of volume seen in the issue Tuesday, a source said.

The notes had recovered 2 points on Monday after shedding 10½ points on Friday.

The Hudson, Ohio-based financial technology company will release its first-quarter earnings report on May 10.

AMC better

AMC’s first- and second-lien paper also was better on the day, a market source said.

The 10% senior secured second-lien notes due 2026 (Caa3/CCC-) rose ¼ point to 84 bid on $11 million of supply on Tuesday.

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) brought to the market in February at par improved over 1 point to a print of 92.688 on $13 million of volume.

The Leawood, Kan.-based movie theater owner reported in March it purchased 22% of Hycroft Mining Holding Corp., which operates the 71,000-acre gold and silver Hycroft Mine in Nevada.

AMC reports first-quarter earnings results on May 9.

Distressed index soft

S&P U.S. High Yield Corporate Distressed Bond index returns were soft at the start of May after finishing April weak.

One-day total returns on Monday were minus 0.72%, compared to minus 0.22% on Friday and minus 0.52% in the same session last week.

Month-to-date total returns were minus 0.72% in the first session of the month after ending April at minus 2.72%.

Quarterly returns through Monday are at minus 3.42%.

Year-to-date index returns widened to minus 8.55% as May kicked off versus minus 7.89% on Friday and minus 7.21% in the week ago session.

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