AMC drops on share pledge; W&T, Ligado lower; Frontier up; GTT, Endo, Mallinckrodt soft

By Cristal Cody

Tupelo, Miss., April 15 – AMC Entertainment Holdings, Inc.’s bonds declined in heavy secondary trading on Thursday following the company’s announcement it intends to issue 500 million new shares.

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) fell more than 2 points to the 87 bid area with $23 million of issues traded, a source said.

The notes traded nearly 2 points higher on $9 million of secondary volume in the previous session.

The issue was quoted at the start of the year at 27 bid.

AMC’s 10½% first-lien senior secured notes due 2025 (Caa2/CCC) softened 5/8 point to 107 3/8 bid on $4 million of secondary volume Thursday.

The 10½% notes have climbed from where the issue traded at the start of January at 73½ bid.

AMC pledged Thursday “that if the shareholders approve this authorization for 500 million new shares to be issued we will not use one of those 500 million shares in calendar year 2021,” chief executive officer Adam Aron said in comments in a YouTube media interview and released in a proxy statement with the Securities and Exchange Commission on Thursday.

“If we need to raise some cash in the short term, remember we already have 43 million shares that are out there that were authorized in the year 2013 that we could use if we wish to raise some cash, if we decide that’s a good idea,” Aron said. “We have made no decisions yet. We are thinking about it, but we haven’t made any decisions yet.”

AMC’s bonds have rallied since January after the company announced it had raised additional funding, including $917 million of new equity and debt capital and another $305 million through its at-the-market equity program.

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

W&T, Ligado down

Distressed energy bonds were mixed on Thursday.

Houston-based oil and gas producer W&T Offshore Inc.’s 9¾% senior secured notes due 2023 (Caa2/B) dropped 1¼ points to 88 bid in light secondary supply, a source said.

Moody’s Investors Service upgraded the company and the notes on Thursday and changed the outlook to stable from negative.

West Texas Intermediate crude oil futures for May and June deliveries climbed higher a second day. May deliveries settled up 31 cents to $63.34 a barrel, while June deliveries settled up 29 cents to $63.51 a barrel.

North Sea Brent crude oil futures for June deliveries added 36 cents to settle at $66.94 a barrel.

Overall market tone was stronger on Thursday.

The iShares iBoxx High Yield Corporate Bond ETF closed up 35 cents, or 0.4%, to $87.48.

Elsewhere, Reston, Va.-based satellite communications company Ligado Networks’ 15½ notes due 2023 (Caa1) were active but down 6¼ points to 95¼ bid in light trading, a market source said. The notes are yielding more than 20%.

Frontier heads up

Frontier Communications Corp.’s bonds improved on Thursday on news the company plans to soon exit Chapter 11 bankruptcy, a source said.

Frontier’s 11% notes due 2025 rose more than ¼ point to 70 bid in strong trading.

The issue was seen in the 53 bid range at the start of the year.

Frontier said in a news release on Thursday that it expects to emerge from bankruptcy in the “coming weeks” after receiving unanimous approval from the California Public Utilities Commission.

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

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

The company filed for Chapter 11 on April 14, 2020.

GTT notes soft

Looking elsewhere in the distressed telecom sector, GTT Communications, Inc.’s 7 7/8% senior notes due 2024 (C) were not active Thursday but were last seen trading Wednesday at 18 bid, a source said.

The bonds opened the year in the 40 bid range.

GTT reported in an 8-K filing with the SEC on Wednesday that lenders have consented to extend a deadline to deliver its audited consolidated financial statements under the credit agreement for the 2020 fiscal year from Wednesday to April 22.

GTT announced on Dec. 22 that certain existing lenders and noteholders had committed to provide the company with a $275 million delayed-draw term loan facility.

Fitch Ratings downgraded the Tyson, Va.-based telecommunications and internet services on March 8, noting the company is likely to undertake a restructuring or a distressed debt exchange in the next year.

S&P dropped the ratings in February, while Moody’s withdrew the ratings on the company in December.

Endo trades lower

Meanwhile, Endo Finance LLC’s 6% senior notes due 2028 (Caa2/CCC+) fell 1½ points to 72½ bid on more than $3.5 million of issues traded Thursday, a market source said.

The notes have softened from 80½ bid in the same session last week.

The bonds traded in early January at 84 bid.

Parent Dublin-based pharmaceuticals maker Endo International plc will report its first-quarter earnings results on May 6.

Mallinckrodt slips

Bankrupt pharmaceuticals maker Mallinckrodt plc’s 4¾% notes due 2023 were quoted modestly softer on the day at 24 bid in thin volume, a source said.

Mallinckrodt (D) filed for Chapter 11 bankruptcy in October in the U.S. Bankruptcy Court for the District of Delaware.

The company, with principal offices in Dublin and St. Louis, has received approval to extend filing a bankruptcy restructuring plan until Aug. 9.

Mallinckrodt announced in March that it reached an agreement with a group of first-lien term lenders holding about $1.3 billion of its outstanding first-lien term loans to support its restructuring support agreement.

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