AMC drifts lower; CSC paper mixed; Sinclair softens; DISH mostly up; short demand high

By Cristal Cody

Tupelo, Miss., Feb. 28 – AMC Entertainment Holdings, Inc.’s bonds softened ahead of the company’s aftermarket release of its fourth-quarter and fiscal 2023 earnings results.

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/D) traded down over ½ point by the afternoon but softened further by the close to head out 1½ points lower.

CSC Holdings, LLC’s notes traded flat to slightly better over the session after strong gains in the week’s first two sessions.

Secondary volumes were much lower in the Altice USA, Inc. subsidiary after nearly $200 million of bonds were traded just on Tuesday following news reports that Charter Communications Inc. was considering a merger with the distressed cable operator.

CSC’s 4 5/8% senior notes due 2030 (Caa2/CCC+) traded flat to ¼ point better on $8 million of volume on Wednesday after attracting $27 million of trading in the prior session.

Elsewhere in the distressed cable space, EchoStar Corp. subsidiary DISH DBS Corp.’s notes were mixed with trading slowed since the company terminated controversial distressed debt exchanges earlier in the month and in January.

DISH’s 5¾% senior secured notes due 2028 (Caa1/B-) were flat over the day.

Sinclair Broadcast Group, Inc.’s bonds softened over ¾ point to more than 1 point in front of the company’s weak earnings report released after the market closed on Wednesday, a source said. The 5½% notes due 2030 (Caa1/B-) fell over ¾ point to a 69 handle and a 12.85% yield on more than $12 million of paper traded.

Meanwhile, short-term paper remains a key focus in the fixed-income market.

“We see a lot of demand on short-term paper on the trading desk,” a source said Wednesday. “An incredible amount of money is being invested inside of one year. Other than that, there’s not much change. Rates are pretty close to where they were – flat curve – where we’ve been for a while now.”

Stocks were under pressure over the afternoon and into the close.

The S&P 500 index declined 0.25%, and the Nasdaq fell 0.58%.

The iShares iBoxx High Yield Corporate Bond ETF rose 1 cent, or 0.01%, to $77.21.

The CBOE Volatility index increased more than 3% to 13.84.

The benchmark 10-year Treasury note yield dropped 4 basis points by early afternoon to 4.27%.

Market consensus is the 10-year note yield will fall below 4% by the end of the year and possibly even by summer, a source said.

AMC notes pressured

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/D) were volatile as the market close neared on Wednesday, sources said.

The issue had given back over ½ point by late afternoon and then pulled back to trade down ¼ point at 77¾ bid before slipping 1½ points on the day to 76½ bid with more than $35 million of paper traded.

The issue fell as low as 75 bid by late afternoon.

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) also were volatile with the issue traded as high as 70 bid and as low as 66¾ bid before the notes went out at 68 1/8 bid with a 17.34% yield on more than $17 million of activity.

The notes were down slightly from 68¼ bid on Tuesday.

AMC reported after the markets closed on Wednesday that fiscal 2023 revenue climbed 23%, while full-year net losses improved to $396.6 million from a $973.6 million loss in 2022.

Fourth-quarter revenue grew 11.5%, and quarterly net losses were reduced to $182 million from a $287.7 million loss a year earlier, AMC said.

S&P earlier in the month downgraded AMC to SD from CCC+ and the 10% issue to default from CCC- after the issuer completed a series of exchanges of the notes that it considers distressed and tantamount to a default.

AMC exchanged $123 million of the 10%/12% cash/PIK second-lien notes for approximately 16.7 million shares of its class A common stock during the fourth quarter.

The Leawood, Kan.-based movie theater company also repurchased $50 million of the bonds over the quarter at an average discount of around 20%.

CSC edges higher

Altice USA subsidiary CSC’s 4 5/8% senior notes due 2030 (Caa2/CCC+) were up about ¼ point by the afternoon but went out mostly flat at 55¼ bid with a 15.56% yield on $8 million of trading, a market source said.

The issue added 3 points on Tuesday to a quote of 55½ bid and a 15.47% yield on $27 million of volume.

CSC’s 7½% senior notes due 2028 (Caa2/CCC) were flat to modestly higher over the afternoon at 70¼ bid and an 18.12% yield on $9.6 million of trading.

The bonds were quoted on Monday over 12 points higher and traded on Tuesday over 1 point better on $24 million of volume.

CSC’s 5¾% senior notes due 2030 (Caa2/CCC+) improved ¼ point on Wednesday to 58¾ bid and a 17.17% yield on $24.76 million of volume an hour ahead of the close.

The bonds added 1½ points on Tuesday to 58½ bid on $21.5 million of supply.

The issue was seen Monday more than 8 points better.

CSC’s notes were quoted up 4 points to over 12 points on Monday as trading soared in the paper on news reports that Charter Communications was considering a takeover of Altice.

The New York-based broadband communications company’s stock had rallied nearly 19% on Tuesday. Shares closed Wednesday up 1.01% at $2.99.

DISH mostly up

DISH’s 5¾% senior secured notes due 2028 (Caa1/B-) were flat in active trading totaling $6 million on Wednesday afternoon, a source said.

The bonds were quoted at 69¼ bid with a 15% yield.

DISH’s 7¾% notes due 2026 (Caa3/CC) were 1 1/8 points better at 61 7/8 bid with a 31.17% yield on $5.6 million of trading by late afternoon but climbed even more by the close to head out at 62¼ bid with a 31.83% yield on more than $8 million of bonds traded.

The 5¼% notes due 2026 (Caa1/B-) were more than 1 point higher at just under 80 bid and a 14.32% yield on $7.24 million of trading during the session.

DISH’s paper has been volatile since the merger with EchoStar in December and after a series of maneuvers in January caused widespread alarm, including transferring assets out of the company and conducting exchange offers that ultimately were terminated due to lack of interest.

On Monday, EchoStar announced it terminated its exchange offer for two tranches of convertible bonds after the minimum tender conditions were not met. In January, EchoStar terminated exchange offers and consent solicitations for four tranches of senior notes from DISH.

In the distressed bond exchange offers canceled in January, DISH DBS had planned to exchange the 5 7/8% senior notes due 2024, 7¾% senior notes due 2026, 7 3/8% senior notes due 2028 and 5 1/8% senior notes due 2029 for up to $3 billion of new secured notes.

EchoStar also faces a deadline in March by the Federal Communications Commission over the company’s commitment to the FCC to construct a nationwide 5G broadband network and a $3.59 billion payment due April 1 to T- Mobile US Inc. for its 800 MHz spectrum licenses.

Englewood, Colo.-based satellite owner EchoStar owns companies that include DISH, HughesNet, Boost Mobile and Sling TV.

Distressed returns higher

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns climbed to 1.51% on Tuesday from 0.2% on Monday.

Month-to-date total returns jumped to 4.37% on Tuesday from 2.81% at the start of the final week of February.

Year-to-date total returns improved to 2.12% in the prior session from 0.6% on Monday.

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