AMC heads up; Home Point Capital nudges higher; Envision rallies; Summit Midstream drops

By Cristal Cody

Tupelo, Miss., Feb. 25 – Distressed secondary action slowed on Friday as the markets absorbed volatility surrounding Russia’s invasion of Ukraine.

The most active bond issues were seen from AMC Entertainment Holdings, Inc. and Home Point Capital Inc., sources reported.

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) gained 2 7/8 points on Friday.

Home Point Capital’s 5% senior notes due 2026 (B3//B-) picked up ½ point after the company reported disappointing fourth-quarter earnings on Thursday.

Envision Healthcare Corp.’s 8¾% senior notes due 2026 (Ca/CC) also continued to rally another 2¼ points on Friday after gaining 4 points in the prior day.

“It really just seemed like today was a bounce back for most of the high-yield and distressed market, but not too crazy,” a source said.

Market tone improved on Friday as equites climbed and volatility dropped 9%.

The iShares iBoxx High Yield Corporate Bond ETF, which added 59 cents on Thursday, climbed 47 cents to $83.61.

Oil slid about $1 over the session.

North Sea Brent crude oil futures for April deliveries settled $1.15 lower at $97.93 a barrel.

Summit Midstream Holdings LLC’s 5¾% senior notes due 2025 (Caa2/B-) traded down 3½ points as its stock plunged over 30% on Friday following the company’s report of a fourth-quarter loss and adjusted 2022 guidance.

Ukraine corporate paper steadied but remained down headed into the weekend.

Kernel Holding SA’s notes were soft but “fairly flat today,” a source said.

The Ukrainian agricultural commodities company’s 6½% senior notes due 2024 (B+/BB-) traded Friday at 42½ bid, down from 81 bid at the start of the week.

AMC bonds gain

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) climbed 2 7/8 points over Friday’s session to head out at 93 bid and yielding over 12%, a source said.

Over $18.5 million of notes were traded.

AMC’s issue was down 1 7/8 points on $21.25 million of secondary volume on Thursday.

The Leawood, Kan.-based movie theater owner’s new 7½% first-lien notes due 2029 were quoted trading over 1¾ points better on the day at 98 7/8 bid.

AMC sold $950 million of the first-lien notes on Feb. 2 at par.

Home Point better

Home Point Capital’s 5% senior notes due 2026 (B3//B-) picked up ½ point on Friday to trade at 83 bid on $11.75 million of secondary action, a source said.

The bump follows Home Point Capital’s report on Thursday of disappointing fourth-quarter earnings and revenue.

The Ann Arbor, Mich.-based company is the parent of Homepoint, the nation’s third-largest wholesale mortgage lender.

Summit Midstream drops

Summit Midstream Holdings’ 5¾% senior notes due 2025 (Caa2/B-) traded down 3½ points to 85½ bid as its stock plunged over 30% on Friday, a source said.

Trading in the bonds was light with $1.3 million of secondary activity.

Summit Midstream Partners, LP’s stock sank 30.63% to $17.26 by the close after the company reported a $16.21 million loss in the fourth quarter, compared to a profit of $102.97 million a year ago.

The Woodlands, Tex.-based midstream energy company provided adjusted 2022 EBITDA guidance of $195 million to $220 million based on 75 to 110 new well connections.

Summit Midstream reported Friday it is “disappointed and frankly surprised by the limited amount of new wells that our customers’ most recent plans are indicating will be turned on-line behind our systems in 2022.”

Envision trades up

Envision Healthcare’s 8¾% senior notes due 2026 (Ca/CC) climbed another 2¼ points on Friday to head out at 52¼ bid, a source said.

The bonds were up 4 points on Thursday after softening about 2¾ points in Wednesday's session.

Nashville-based Envision is a health care company and hospital-based physician group.

Distressed returns drag

The S&P U.S. High Yield Corporate Distressed Bond index declined in market volatility on Thursday as Russia invaded Ukraine.

The one-day total return slid to minus 1.61% from minus 0.56% on Wednesday and 0.03% on Tuesday.

Month-to-date total returns dropped to minus 3.37% versus minus 1.8% on Wednesday and minus 1.24% at the start of the holiday-shortened week.

Year-to-date index returns were at minus 4.85%, compared to minus 3.3% on Wednesday and minus 2.75% on Tuesday.

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