AMC notes slip; Frontier, Mallinckrodt distressed paper gains; Weatherford improves

By Cristal Cody

Tupelo, Miss., Feb. 4 – AMC Entertainment Holdings, Inc.’s distressed bonds unwound some of Wednesday’s gains in heavy trading on Thursday.

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) slipped 3½ points to 65 bid, a source said.

The bonds had recovered 4¾ points to trade at 68¼ bid on Wednesday after softening 9¾ points on Tuesday.

The company’s notes rallied over the prior week after AMC announced additional funding raised.

The 12% notes traded Jan. 22 at 39½ bid and at the start of the year at 27 bid.

Frontier, Mallinckrodt active

In bankrupt names active in the secondary market on Thursday, Frontier Communications Corp.’s 7 5/8% notes due 2024 saw strong trading volume at 53¾ bid, a source said.

The notes were last seen in heavy supply on Tuesday at 52¼ bid.

Frontier expects to emerge from bankruptcy early in 2021.

The company announced in January that it received approval from the Federal Communications Commission for its Chapter 11 bankruptcy restructuring.

The U.S. Bankruptcy Court for the Southern District of New York confirmed the company’s plan of reorganization in August.

Pharmaceuticals maker Mallinckrodt plc’s 5 5/8% notes due 2023 were quoted at 47½ bid in heavy secondary trading on Thursday, up from where the notes started the week at 41 bid, a source said.

The company filed for Chapter 11 bankruptcy in October.

In a motion filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware, Mallinckrodt said it has reached an agreement with restructuring support agreement parties to pursue a plan of reorganization.

Meanwhile, bankrupt car rental company Hertz Corp.’s distressed bonds saw thin trading over Thursday’s session, a market source said.

The company’s 7% senior notes due 2028 were quoted at 53 bid in light volume.

Hertz filed for Chapter 11 bankruptcy in May.

In January, the company received bankruptcy court approval to dispose of at least 121,510 lease vehicles in a master lease agreement in exchange for paying noteholders $756 million in nine monthly payments of $84 million.

The company’s second settlement order prolongs the company’s bankruptcy through the third quarter, according to a Fitch Ratings report on Wednesday.

Fitch said it expects Hertz will attempt to emerge from bankruptcy this year.

Chesapeake Energy Corp.’s bonds traded flat to better over Thursday’s session as the company readies to emerge from Chapter 11 bankruptcy following a $1 billion two-part sale of senior notes on Tuesday.

The 7% senior notes due 2024 were not active during the session and were last seen trading at 6¼ bid on Wednesday, a source said.

The energy company’s 8% notes due 2025 edged up to 6 bid from 5.9 bid in the prior session.

Energy issues mixed

Energy bonds were mixed over the day, market sources reported.

Oil and gas company Weatherford International plc’s 11% senior notes due 2024 (B3/CCC) continued to improve on Thursday, trading at 92¾ bid. The notes rose 4 1/8 points on Wednesday to 92 5/8 bid.

Petroleum refiner and supplier PBF Holding Co., LLC’s 9¼% senior secured notes due 2025 (Ba3/BB/BB) softened ¼ point to 95¾ bid over the day.

Oil and drilling contractor Nabors Industries Ltd.’s 5.1% senior notes due 2023 (Caa2) fell 1¾ points to 86 bid after gaining 2¼ points on Wednesday.

Oil futures ticked higher on Thursday.

North Sea Brent crude oil futures for April deliveries rose 38 cents to settle the day at $58.84 a barrel.

West Texas intermediate crude oil for March deliveries settled up 54 cents at $56.23 a barrel.

Market tone was strong over the day with major stock indices closing up more than 1% ahead of the release on Friday of the Labor Department’s January jobs report.

The iShares iBoxx High Yield Corporate Bond ETF rose 18 cents, or 0.21%, to finish at $87.40.

As of Wednesday, the S&P U.S. High Yield Corporate Distressed Bond index has a month-to-date total return of 0.73% and a year-to-date total return of 9.23%.

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