American Airlines notes vary as aid talks continue; AMC eyed on more theater openings

By James McCandless

San Antonio, Oct. 8 – Travel tranches continued to see high levels of attention in the distressed debt space.

American Airlines Group, Inc.’s notes varied as lawmakers continued to take positions on providing payroll aid to the industry.

Sector peer United Airlines Holdings, Inc.’s issues moved upward.

Elsewhere, AMC Entertainment Holdings, Inc.’s paper diverged in direction as the company announced more theater openings.

REIT Uniti Group Inc.’s notes were under water despite receiving a second ratings upgrade in as many days.

Mall owner peer CBL & Associates Properties, Inc.’s issues dipped.

Meanwhile, in retail, Revlon, Inc.’s paper was seen trailing after the company announced a modification to its tender offer procedures.

On a positive day for oil futures, improvements were seen by Occidental Petroleum Corp.’s, Antero Resources Corp.’s and SM Energy Co.’s notes.

Airlines in focus

American Airlines’ notes varied through the Thursday session, traders said.

The 5% senior notes due 2022 dropped ½ point to close at 70 bid. The 11¾% senior notes due 2025 moved up 3 points to close at 100¾ bid.

In the middle of Thursday’s activity, U.S. House speaker Nancy Pelosi, D.-Calif., said that federal payroll aid for the Fort Worth-based carrier and others in the space would only be passed if the measure was part of a broader stimulus package.

The company’s chief executive officer said in response that the legislation has broad bipartisan support but is stuck in “a frustrating process.”

On Tuesday, president Donald Trump abruptly announced the halt of all negotiations over more coronavirus stimulus, later saying that he would sign separate bills for different matters, including airline aid.

The sector has been pushing for a new round of aid since September, before the first round of $25 billion expired on Oct. 1.

After the deadline, American Airlines issued furloughs for thousands of its workers, promising to rescind those furloughs if a new round of aid was passed.

“If this show continues, the bonds will get softer,” a trader said.

Chicago-based sector peer United Airlines’ issues moved upward.

The 5% senior notes due 2024 rose ½ point to close at 90 bid. The 4¼% senior notes due 2022 improved by ¾ point to close at 95¼.

AMC diverges

Elsewhere, theater name AMC’s paper diverged in direction, market sources said.

The 10½% notes due 2025 picked up 1 point to close at 66½ bid. The 12% paper due 2026 shaved off ¾ point to close at 14½ bid.

On Thursday morning, the Leawood, Kan.-based movie theater operator announced that it would reopen an additional 14 locations in Washington state.

With those openings coming on Oct. 16, the company plans to have more than 520 of its 600 locations open nationwide.

Over the last month, AMC has progressively opened more of its theaters in order to make up for lost revenue after the pandemic led it to temporarily shutter them.

AMC has moved in the opposite direction of peer Cineworld, which decided this week to close all of its Regal locations in the United States until further notice.

Uniti, CBL slip

Property owner Uniti’s notes were under water as the day ended, traders said.

The 8¼% senior notes due 2023 shed ¼ point to close at 99½ bid. The 7 7/8% senior secured notes due 2025 edged ¼ point lower to close at 107 bid.

Early Thursday, the Little Rock, Ark.-based real estate investment trust received a second ratings upgrade in as many days.

S&P Global Ratings raised the company’s issuer credit rating and issue-level ratings and removed all ratings from CreditWatch.

The agency moved on the name after it and its largest customer, Windstream, resolved all legal disputes as Windstream exited bankruptcy.

The outlook is stable.

On Wednesday, Moody’s Investors Service updated the company’s corporate family rating, probability of default rating and issue level ratings for similar reasons.

Chattanooga, Tenn.-based mall name CBL’s issues dipped.

The 5¼% senior notes due 2023 chalked off ¾ point to close at 38¼ bid.

Revlon trails

Meanwhile, in retail, Revlon’s paper was spotted trailing, market sources said.

The 5¾% senior notes due 2021 lost ¼ point to close at 34¼ bid. The 6¼% senior paper due 2024 moved down 2¾ points to close at 12¼ bid.

The New York-based cosmetics producer announced a modification to the early tender deadline procedures for the offer by subsidiary Revlon Consumer Products Corp. to exchange any and all outstanding $344,785,000 of the 2021 notes for cash or a combination of cash and ABL FILO term loans and new BrandCo second-lien term loans, Prospect News reported.

Because of the Oct. 12 holiday, tenders for the mixed consideration will be considered timely if they are validly submitted through the Automated Tender Offer Program by 5 p.m. ET on Oct. 13.

Concurrently, Revlon is soliciting consents to eliminate substantially all of the restrictive covenants and certain events of default provisions from the indenture governing the notes.

Oil futures higher

On a positive day for oil futures, distressed energy tranches saw improvements, traders said.

West Texas Intermediate crude oil futures for November delivery shot up $1.24 to end the session at $41.19 per barrel.

North Sea Brent crude oil futures for December delivery finished at $43.34 per barrel after a $1.35 jump.

Futures were pushed higher after production cuts were made to accommodate the incoming hurricane on the Gulf Coast.

Houston-based independent oil and gas producer Occidental Petroleum’s notes picked up steam.

The 2.9% senior notes due 2024 garnered 1 point to close at 88 bid. The 2.7% senior notes due 2022 pushed up ½ point to close at 96½ bid.

Denver-based producer Antero Resources’ issues were also a part of the trend.

The 5 5/8% senior notes due 2023 gained 3¾ points to close at 77 bid. The 5% senior notes due 2025 picked up 3¼ points to close at 68 bid.

SM Energy, another Denver-based E&P, saw its paper end the session at better levels.

The 5 5/8% senior notes due 2025 were lifted 1 point to close at 47½ bid. The 6 5/8% senior notes due 2027 improved by 1½ points to close at 46 bid.

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