Rebound plays up; AMC flat; energy paper mixed; Intelsat Jackson drops; Diamond Sports better

By Cristal Cody

Tupelo, Miss., Aug. 6 – Paper from pandemic-impacted issuers, including airlines and cruise operators, bounced back by the end of the week.

Carnival Corp.’s new 4% senior secured first-priority notes due 2028 (Ba2/BB-) priced in July still traded below par but picked up 1¼ points Friday to head out at 99½ bid, a source said.

“The rebound plays that took a dive are slowing creeping back up,” according to a market source. “Besides that, it’s been a pretty slow week – just that and earnings.”

Movie theater owner AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) were flat in thin trading.

Energy bonds were mixed during the session as oil prices settled lower.

Transocean Inc.’s 8% debentures due 2027 (C/CCC) dipped ¼ point.

PBF Holding Co. LLC’s 9¼% senior secured notes due 2025 (Ba3/BB/BB) rose about 5/8 point.

Meanwhile, Intelsat Jackson Holdings SA’s bonds declined after a trustee objected to the company’s Chapter 11 plan of reorganization disclosure statement on Friday.

Intelsat Jackson Holdings’ 9¾% senior notes due 2025 sank 3¼ points.

In other distressed secondary trading, Diamond Sports Group LLC’s bonds continue to attract interest with the company’s 5 3/8% senior secured notes due 2026 (B2/CCC+) higher on Friday.

“It trades at a ridiculous discount, at like 60 cents on the dollar, but it’s doing interesting stuff in the sports betting arena,” a source said. “The 5 3/8% 2026 are up ¾ point today.”

In the distressed pharmaceuticals space, Endo International plc’s paper was mostly flat over the day.

“There wasn’t a lot of movement today,” a source said. “The 9½%s touched 103 in July, but now it’s down, unchanged on the day.”

Mallinckrodt plc’s 5½% notes due 2025 headed out Friday 4 points softer on the week.

Distressed index improves

Overall market tone was mixed Friday, while oil prices drifted lower.

The iShares iBoxx High Yield Corporate Bond ETF fell 10 cents to end at $87.38.

North Sea Brent crude oil futures for October deliveries dropped 59 cents to settle at $70.70 a barrel.

West Texas Intermediate crude oil benchmark futures for September deliveries fell 81 cents to settle at $68.28 a barrel.

Benchmark October deliveries settled 64 cents lower at $68.10 a barrel.

Measured market volatility lessened following the Labor Department’s release of the July jobs report.

The Chicago Board Options Exchange’s CBOE Volatility Index fell 6.54% by the close to 16.15.

The better-than-expected employment data helped give a “glimmer of hope that the recovery will not be significantly affected,” Confluence Investment Management, LLC strategists said in a note on Friday.

The Labor Department said total nonfarm payroll employment rose 943,000 in July, beating market expectations of an 870,000 increase. The unemployment rate fell 0.5 percentage point to 5.4%, better than market forecasts of a 5.7% rate.

Distressed returns ended Thursday stronger on the day and month to date.

The S&P U.S. High Yield Corporate Distressed Bond Index had a one-day total return of 0.02% on Thursday, compared to total returns of minus 0.18% on Wednesday, minus 0.26% on Tuesday and minus 0.10% on Monday.

Month-to-date total returns for August to date improved to minus 0.52% from minus 0.54% on Wednesday and minus 0.36% on Tuesday.

The distressed index’s year-to-date total returns as of Thursday totaled 23.25%, compared to 23.23% on Wednesday, 23.45% on Tuesday and 23.07% on Monday.

AMC notes steady

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) traded mostly flat at 85¼ bid after picking up 1¼ points Thursday, a source said.

The secured notes declined 3½ points on Wednesday, 1 3/8 points on Tuesday and 1½ points on Monday.

The bonds are down 4 points from a week ago and off from the 102 bid area at the start of July.

The Leawood, Kan.-based movie theater chain is scheduled to release second-quarter earnings results on Monday.

Transocean notes weaker

Transocean’s 8% debentures due 2027 (C/CCC) softened ¼ point to 70 bid on Friday, a market source said.

The issue has declined 4½ points from a week ago.

The Vernier, Switzerland-based offshore driller’s notes have declined more than 15 points since the start of July.

PBF bonds mixed

PBF Holding’s 9¼% senior secured notes due 2025 (Ba3/BB/BB) traded up about 5/8 point to 88¾ bid by late afternoon, a source said.

The issue was ending the week 4 points softer after falling below par in July.

The Parsippany, N.J.-based petroleum refiner’s 7¼% senior notes due 2025 (B3/B+/B+) were mostly unchanged in the 58 bid area on Friday.

The issue has declined more than 20 points over the past month.

Intelsat Jackson declines

Intelsat Jackson Holdings’ 9¾% senior notes due 2025 traded down 3¼ points on Friday to 55 bid, a market source said.

The issue has declined from 71½ bid at the start of the year.

Intelsat Jackson’s 5½% senior notes due 2023 were last Thursday down ½ point at 53 bid.

The notes were 2 points softer month to date and down from the 67½ bid range at the start of the year.

Luxembourg-based parent company Intelsat SA’s Chapter 11 disclosure statement and solicitation procedures motion hearing, originally scheduled for May 11, is now scheduled for Aug. 26 in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division.

The McLean, Va.-based satellite operator filed for Chapter 11 bankruptcy on May 4, 2020.

Diamond Sports gains

Diamond Sports Group’s bonds improved in active trading Friday, a source said.

The company’s 5 3/8% senior secured notes due 2026 (B2/CCC+) rose ¾ point to 60¼ bid by the close.

The notes headed out about 1¾ points higher on the week.

Diamond Sports’ paper declined in June and July after parent company Sinclair Broadcast Group, Inc. disclosed unsuccessful attempts to secure new funding for the Chesapeake, Va.-based sports broadcast group.

Endo unchanged

Endo Finance LLC’s 6% senior notes due 2028 (Caa2/CCC+) traded flat on the day at 65 bid after gaining ¾ point in the prior session, a source said.

The notes are 2¾ points softer from a week ago after dropping 1¼ points on Wednesday, 1½ points on Tuesday and ¾ point on Monday.

Endo’s 9½% senior secured notes due 2027 (Caa2/CCC+) were last seen trading Thursday at 97¾ bid, down about ½ point on the week.

Endo’s paper has mostly given back gains made in July after the Dublin-based pharmaceuticals maker announced a $35 million opioid-related settlement. The company on Thursday reported revenue rose 4% to $714 million for the second quarter.

Mallinckrodt soft

Mallinckrodt’s 5½% notes due 2025 were quoted Friday at 65¼ bid, down 4 points so far in August, a source said.

The bankrupt pharmaceuticals maker filed a new joint Chapter 11 plan of reorganization and received conditional approval of its disclosure statement on June 16.

A confirmation hearing is scheduled for Sept. 21-22.

The company, based in Dublin and St. Louis, filed for Chapter 11 bankruptcy on Oct. 12 in the U.S. Bankruptcy Court for the District of Delaware.

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