AMC notes trade lower; Ligado, Diamond Sports, Nabors bonds perk up; Frontier improves

By Cristal Cody

Tupelo, Miss., April 28 – AMC Entertainment Holdings, Inc.’s distressed bonds softened in heavy secondary trading on Wednesday, a day after the company reported expectations of a first-quarter loss and plans to issue new stock.

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) fell 1¼ points to 85¾ bid on more than $30.5 million of issues traded, a source said.

The notes have declined from trading in early April at 90 bid but remain well off the 27 bid seen at the start of the year.

On Tuesday, the company filed a 424B5 filing with the Securities and Exchange Commission to issue up to 43 million shares of its class A common stock with proceeds slated for general corporate purposes, including working capital and to repay, refinance or redeem existing debt.

AMC said in a news release on Tuesday that it was cancelling a plan to seek approval at its May 4 annual stockholders meeting to allow 500 million more authorized common shares.

AMC chief executive officer Adam Aron said in comments in a YouTube media interview and released in a proxy statement with the SEC on April 15 that the company was considering issuing 500 million new shares.

Also on Tuesday, AMC reported preliminary first-quarter results in an 8-K filing that lists expected total revenue of $148.3 million versus $941.5 million in the year-ago period.

The company expects a net loss between $572.2 million and $567.2 million for the quarter ended March 31.

AMC, a Leawood, Kan.-based movie theater owner, reported in March that 98% of its U.S. locations have reopened.

Ligado hits par

In other distressed secondary trading, Ligado Networks’ 15½% senior secured first-lien notes due 2023 (Caa1) rose ½ point to hit par on Wednesday, a source said.

The notes climbed 2 points on Tuesday and are trading 3 points higher week to date.

The Reston, Va.-based satellite communications company’s bonds were up on reports the company plans to price a new debt offering.

Diamond Sports edges up

Diamond Sports Group LLC’s 6 5/8% senior notes due 2027 (Caa2/CCC-) edged up 1/8 point to 53 5/8 bid in continued heavy secondary supply on Wednesday, a market source said.

The notes have added 5 3/8 points week to date.

Diamond Sports’ 5 3/8% senior secured notes due 2026 (B2/CCC+) added ½ point to trade at 73¼ bid during the session, going out about 3¼ points better week to date.

The company’s bonds had weakened since February after parent company Sinclair Broadcast Group, Inc. reported soft guidance for the Chesapeake, Va.-based sports broadcast group along with an interest in liability management initiatives that could include a debt exchange or redemption.

Nabors, Transocean gain

Overall market tone was mixed after the Federal Reserve left the benchmark interest rate unchanged on Wednesday, while market participants also were focused on the slew of corporate earnings reports released over the day.

The iShares iBoxx High Yield Corporate Bond ETF closed up 17 cents at $87.38.

Oil prices continued to gain.

West Texas intermediate crude oil benchmark futures for June deliveries rose 92 cents to settle at $63.86 a barrel.

North Sea Brent crude oil futures for June deliveries settled at $67.27 a barrel, up 85 cents.

In the secondary market, oil and gas drilling contractor Nabors Industries Inc.’s 5¾% senior notes due 2025 (Caa2/CCC-) were seen up 1¾ points at 82½ bid on $3 million of paper traded, a source said.

Offshore driller Transocean Inc.’s 11½% senior guaranteed notes due 2027 (Caa3/CCC) rose 1¼ points to head out at 96 bid on $8.5 million of secondary volume.

Frontier flat to higher

Frontier Communications Corp.’s bonds traded mostly flat to higher in strong secondary trading again on Wednesday, according to a market source.

The company’s 10½% notes due 2022 headed out unchanged at 75 bid. The notes are up ½ point week to date and more than 4 points higher from the same session a week ago.

Frontier’s 11% senior notes due 2025 rose ¼ point to 75½ bid by late afternoon. The 11% notes are up 1 point week to date and trading more than 3½ points better from the same day a week ago.

The company is set to exit Chapter 11 bankruptcy on April 30 and plans to eliminate more than $10 billion of debt in its restructuring plan with unsecured bondholders representing more than 75% of the company’s approximate $11 billion of outstanding unsecured bonds.

Frontier said the restructuring agreement leaves unimpaired all general unsecured creditors and holders of its secured and subsidiary debt.

The company filed for Chapter 11 on April 14, 2020 in the U.S. Bankruptcy Court for the Southern District of New York.

The Norwalk, Conn.-based telecommunications company’s new common stock will begin trading on the Nasdaq on May 4 under the ticker “FYBR.”

CBL unchanged

Elsewhere, bankrupt real estate investment trust CBL & Associates LP’s 5¼% notes due 2023 traded flat on the day at 57½ bid, a source said.

The bonds are down ½ point from the same day a week ago but up from the 40 bid range at the start of the year.

CBL’s bonds have improved since the Chattanooga, Tenn.-based owner and developer of malls and shopping centers reported on March 22 that it expects to eliminate more than $1.6 billion of debt under a new restructuring plan.

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

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