AMC active; National CineMedia notes improve; Callon, Transocean, Peabody decline

By Cristal Cody

Tupelo, Miss., March 23 – Distressed bonds in Covid-19 hard-hit sectors were mixed on Tuesday as swaths of the country’s businesses start to reopen.

AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) fell 3¾ points to 81 bid, a market source said.

The notes have softened from 85 bid in the same session last week.

AMC’s bonds overall remain stronger with the bulk now trading near par or higher, a source said.

The company’s 10½% first-lien senior secured notes due 2025 (Caa2/CCC) traded Tuesday in the 107 bid range, up from where the issue was seen in January at 73½ bid.

The Leawood, Kan.-based movie theater owner reported that as of Friday, 98% of its U.S. locations are now open, including more than 40 sites in California.

London-based Cineworld Group plc announced Tuesday that its movie theater chain, Regal Theatres, will reopen U.S. cinemas starting April 2. The company plans to reopen its U.K. theaters in May.

Centennial, Colo.-based cinema advertising company National CineMedia, LLC’s 5¾% senior notes due 2026 (Caa3/CCC+) traded at 88¼ bid on Tuesday, a source reported.

The notes are up 1¼ points from the same day a week ago and more than 15 points better since the start of the year.

Market tone was mixed on Tuesday following the first of two days of Congressional testimony from Federal Reserve chairman Jerome Powell.

Powell said economic recovery from the pandemic has progressed more quickly than expected, but the sectors most affected by the resurgence of the virus and by greater social distancing “remain weak, and the unemployment rate, still elevated at 6.2%, underestimates the shortfall.”

The iShares iBoxx High Yield Corporate Bond ETF improved 9 cents, or 0.10%, to close Tuesday at $86.46.

Oil prices plunged after edging higher on Monday.

West Texas intermediate crude oil futures for May deliveries fell $3.80 to settle the day at $57.76.

North Sea Brent crude oil futures for May deliveries dropped $3.83 to settle at $60.79 a barrel.

Energy bonds soften

Energy-related bonds mostly declined over the day, sources reported.

Callon Petroleum Co.’s 6¼% senior notes due 2023 (Caa2/D) headed out down 3¾ points in secondary trading to 87½ bid.

Offshore driller Transocean Inc.’s 11½% senior guaranteed notes due 2027 (Caa3/CCC) dropped 3 points to 84¼ bid after falling 1½ points on Monday.

Oil and gas drilling contractor Nabors Industries Inc.’s 5¾% senior notes due 2025 (Caa2/CCC-) fell 3 points to 75 bid by late afternoon.

Shelf Drilling Holdings Ltd.’s 8¼% senior notes due 2025 (Caa3/CCC+) also slid 3 points during the session to 70 bid.

In other distressed energy issues traded Tuesday, coal producer Peabody Energy Corp.’s 8½% senior secured notes due 2024 (Caa1/CCC-) softened 2 points to 54 bid.

CBL notes climb

Bonds from bankrupt real estate investment trust CBL & Associates LP continued to climb in the distressed secondary market after the company reported Monday it expects to eliminate $1.6 billion of debt under a new restructuring plan.

The company’s 5¼% notes due 2023 rose 1½ points to 54 bid, while CBL’s 5.95% senior notes due 2026 improved ¼ point over the day to 54 bid, a source said.

CBL and 176 affiliated companies filed for Chapter 11 bankruptcy on Nov. 1 and Nov. 2 in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.

The Chattanooga, Tenn.-based owner and developer of malls and shopping centers reported Monday that under the new restructuring plan, more than $1.6 billion of debt and preferred obligations will be eliminated with noteholders receiving cash, new senior secured notes and other debt and equity in exchange.

The company on Friday received an extension through May 31 to file and through July 29 to solicit votes on the new restructuring plan.

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