Endo lower; Mallinckrodt paper quiet; AMC down; National CineMedia dips; Shimao softens

By Cristal Cody

Tupelo, Miss., Dec. 17 – Distressed opioid-related pharmaceutical paper stayed mostly quiet on Friday after a federal judge overturned a $4.5 billion settlement with the Sackler family on future opioid claims tied to Purdue Pharma LP.

Endo International plc’s notes were down nearly 1 point.

Paper from bankrupt pharmaceutical company Mallinckrodt plc was thinly traded over the week and remained quiet on Friday, a source said.

The Dublin- and St. Louis-based company also faces opioid-related lawsuits moving through the Chapter 11 bankruptcy court.

The company’s 5½% senior notes due 2025 were last seen Thursday trading at the 55 bid area, about 1½ points down from last week.

Among the most active issuers in the distressed space during the session was AMC Entertainment Holdings, Inc., a source said.

AMC’s secured notes fell 1 3/8 points on $27 million of volume after the company reported that the Thursday opening of Spider-Man: No Way Home broke its box office records as the highest grossing movie on an opening night in December.

National CineMedia, LLC’s notes also were lower on the day.

In China’s property space, bonds from Shimao Group Holdings Ltd. declined on Friday after the company was dropped to pure junk by Fitch Ratings and downgraded by Moody’s Investors Service.

The space has seen defaults from issuers including China Evergrande Group, Kaisa Group Holdings Ltd., Fantasia Holdings Group Co. Ltd., Sinic Holdings (Group) Co. Ltd., China Properties Group Ltd., Modern Land (China) Co. Ltd. and Sunshine 100 China Holdings Ltd.

On Friday, S&P dropped China Evergrande and subsidiary Tianji Holding Ltd. to SD from CC following the end of grace periods on missed coupon payments.

Overall market tone stayed soft on Friday with equities weaker a second day.

The iShares iBoxx High Yield Corporate Bond ETF declined 8 cents to close at $86.37.

Oil prices sank $1.50 over the session after climbing over $1 on Thursday.

West Texas Intermediate crude oil benchmark futures for January deliveries settled down $1.52 at $70.86 a barrel.

Endo trades lower

Endo Finance LLC’s 6% senior notes due 2028 (Caa3/CCC-) fell nearly 1 point to 73½ bid on Friday, a source said.

The notes are about 3¾ points softer from a week ago.

Endo’s paper has been volatile over the week on several announcements, including on Wednesday that a California trial court issued a final ruling that the company’s subsidiaries are not liable for opioid claims and a notice from Eagle Pharmaceuticals, Inc. that it received approval of a generic drug cleared by a court of infringement on Endo’s patents.

Endo’s notes were lower on Tuesday after Texas’ attorney general announced an investigation into the company’s subsidiarity and AbbVie Inc. (Baa2/BBB+) over the advertisement and promotion of hormone puberty blockers for unapproved uses without disclosing potential risks.

The Dublin-based pharmaceutical maker announced in September that the company and its subsidiaries reached agreements to settle opioid-related lawsuits in Louisiana and New York, following a $35 million settlement in Tennessee announced in July.

AMC, National CineMedia off

Paper from AMC Entertainment and National CineMedia declined on Friday with issues in the reopening space lower over much of the week as the Omicron Covid-19 variant spreads, a source said.

AMC’s 10% senior secured second-lien notes due 2026 (Ca/CCC-) fell 1 3/8 points to 93 7/8 bid on $27 million of volume.

The notes softened 1¾ points on Thursday and dropped 4 3/8 points on Wednesday.

AMC said Friday that in addition to notching the highest opening night record for a movie in December with 1.1 million people attending Thursday’s showing, the Spider-Man release was the second highest all-time grossing movie title on its opening night.

The Leawood, Kan.-based movie theater owner’s bonds have been soft following disclosures last week that insiders sold $10 million of shares.

In the cinema advertising space, National CineMedia’s 5 7/8% senior secured notes due 2028 (B3/CCC+) went out nearly 1½ points lower at the 88 bid area, a source said.

Volume in the Centennial Colo.-based company’s secured notes totaled $1.6 million.

Shimao down

Shimao’s 4¾% notes due 2022 (Ba3/BB/BB) fell 1½ points to the 63¼ bid area on $1.4 million of supply Friday, a source said.

The notes were up nearly 5 points on Thursday on $3.8 million of paper traded.

Shimao’s paper plunged about 8 points to 19 points on Tuesday and fell another 2¼ points on Wednesday.

The Hong Kong-based holding company focused on property management, development and sales was downgraded on Friday by Moody’s to Ba3 from Ba1 and by Fitch to BB from BBB- due to weak sales and financing conditions.

Distressed index better

Distressed index daily returns were soft but improved on Thursday, according to the latest data available.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return declines narrowed to minus 0.16% from minus 0.21% on Wednesday and minus 0.44% on Tuesday. The index saw a 0.02% return on Monday.

Month-to-date returns were down to 0.78% from 0.94% on Wednesday, 1.15% on Tuesday and 1.59% at the start of the week.

Year-to-date total returns fell to 22.72%, compared to 22.92% on Wednesday, 23.17% on Tuesday and 23.71% on Monday.

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