AMC notes jump following vaccine news; Party City trades higher as earnings posted

By James McCandless

San Antonio, Nov. 9 – Top traders in the distressed debt market made significant gains on Monday as a pharmaceutical giant announced a potential vaccine for Covid-19.

AMC Entertainment Holdings, Inc.’s notes made outsized gains as Pfizer Inc. announced that a vaccine candidate was showing effectiveness.

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

Elsewhere, retailer Party City Holdco Inc.’s paper moved in a positive direction on a combination of the day’s news and positive Q3 earnings.

Pet supplies seller PetSmart, Inc.’s notes saw varying movements.

Meanwhile, the headlines also provided a boost for CBL & Associates Properties, Inc.’s and Washington Prime Group, Inc.’s issues.

As oil futures leaped with the news, Occidental Petroleum Corp.’s, SM Energy Co. and Antero Resources Corp.’s paper mirrored that improvement.

Theaters gain

AMC’s note made outsized gains at the start of the week, traders said.

The 10½% notes due 2026 jumped up 11½ points to close at 68 bid. The 12% notes due 2026 rose 9¾ points to close at 17½ bid.

Early Monday, the Leawood, Kan.-based movie theater chain’s structure received a boost after pharmaceutical company Pfizer announced that a candidate vaccine for Covid-19 has been found to be more than 90% effective in clinical trials.

For the last few months, AMC has been betting on more demand for theater screenings as it reopened its locations nationwide.

By the end of October, more than 80% of its theaters were open.

Despite this, consumer demand continues to lag, emblematic in the company’s third-quarter loss of $5.70 per share and revenues of $119.5 million.

“If this is true, we are still some ways out from being able to take the vaccine,” a trader said. “I imagine that before that, a lot of these gains will be reversed.”

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

The 5 1/8% senior notes due 2022 tacked on 5 points to close at 96 bid. The 4 7/8% senior notes due 2023 added 5½ points to close at 92 bid.

Party City notes rise

Elsewhere, retailer Party City’s paper moved in a positive direction, market sources said.

The 6 5/8% senior paper due 2026 garnered 2¼ points to close at 40¼ bid.

As the market opened on Monday, the Elmsford, N.Y.-based party supplies retailer posted better-than-expected results for the third quarter.

The company reported a profit of 10 cents per share, better than the 46 cent per share loss that analysts had expected.

Revenues also outpaced predictions at $533.78 million.

Party City also said that same-store sales improved by 8.3% and foresaw a positive outlook for the fourth quarter.

For the previous two quarters, Party City posted losses as the coronavirus pandemic led to the shutdown of non-essential businesses to slow the spread of the virus.

Pet supplies chain PetSmart’s notes saw activity.

The 8 7/8% senior notes due 2025 held level to close at 101¼ bid. The 5 7/8% senior notes due 2025 moved up ½ point to close at 102¼ bid.

CBL improves

Property owner CBL’s issues were also provided with a boost, traders said.

The 5¼% senior notes due 2023 reached up 1 point to close at 39¼ bid. The 4.6% senior notes due 2024 garnered ¾ point to close at 40 bid.

The Chattanooga, Tenn.-based real estate investment trust’s tranches shared in the day’s positivity as the potential for a vaccine sparked optimism market wide.

Throughout the year, the company has incurred quarterly losses as it kept malls and other facilities closed to meet government mandates about the coronavirus.

Last week, the company filed for Chapter 11 bankruptcy, which includes a plan to exchange $1.4 billion in its debt for a 90% stake in new equity.

Columbus, Ohio-based mall name Washington Prime’s paper followed market trends.

The company reported a loss of 23 cents per share and revenues of $123.7 million for the third quarter.

The 6.45% senior notes due 2024 gained 4 points to close at 56½ bid.

Oil futures leap

As oil futures also leaped with the potential vaccine news, distressed energy names mirrored those improvements, market sources said.

West Texas Intermediate crude oil futures for December delivery shot up $3.15 to settle at $40.29 per barrel.

North Sea Brent crude oil futures for January delivery capped the day at $42.40 after a $2.95 jump higher.

Houston-based independent oil and gas producer Occidental Petroleum’s notes were seen improving.

The 2.9% senior notes due 2024 grabbed 3¼ points to close at 92¾ bid. The 2.7% senior notes due 2022 rose ½ point to close at 97 bid.

Denver-based producer SM Energy’s issues were part of the prevailing trend.

The 5 5/8% senior notes due 2025 shot up 4 points to close at 45 bid. The 6 5/8% senior notes due 2027 gained 4¾ points to close at 45 bid.

Antero Resources, another Denver-based E&P company, saw its paper move on a positive track.

The 5 1/8% senior notes due 2022 inched up ¼ point to close at 96 bid. The 5% senior paper due 2025 tacked on 2½ points to close at 81½ bid.

© 2015 Prospect News.
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