DISH stronger for week; AMC mixed ahead of preliminary financials; Ardagh notes higher

By Cristal Cody

Tupelo, Miss., April 26 – Looking at distressed paper Friday, DISH DBS Corp.’s 7 3/8% senior notes due 2028 (Caa1/CCC) traded down ½ point but ended the week around 2¾ points higher.

AMC Entertainment Holdings, Inc.’s bonds were mixed ahead of the company’s after-market release of preliminary first-quarter results with the 7½% senior secured first-lien notes due 2029 (Caa1/B-) 1/8 point higher on the day and under 1 point better on the week.

Market tone declined widely on Thursday but reversed course on Friday with the Commerce Department’s Personal Consumption Price index coming in line with forecasts at 0.3%.

“It’s definitely been a little bit of a ride here,” a market source said. “The Fed’s going to be data dependent. You’ve had a bunch of data points recently that were suggestive the Fed ain’t going to be cutting anytime soon. The sentiment is constantly shifting based on what those data points are or expectations of what the Fed might be doing or not doing.”

Treasury yields pulled back after climbing midweek. The benchmark 10-year note yield, which hit 4.7% on Thursday, fell 3 basis points to 4.66%

The S&P 500 index was nearly 1% better over the morning and went out 1.02% higher.

The iShares iBoxx High Yield Corporate Bond ETF rose 24 cents, or 0.31%, to $76.62.

The CBOE Volatility index retreated over 2% to 15.03.

So far this year, junk bond defaults total around $9.6 billion with an average recovery of 53 points and loan defaults total approximately $19 billion with an average recovery of 56 points, according to a BofA Securities research note on Friday.

Ardagh Group SA’s affiliated paper went out better on the week following the release on Thursday of the company’s interim consolidated first-quarter earnings report but continued to trade lower on the year as the company undertakes a distressed debt transaction.

Ardagh Packaging Finance plc’s 5¼% senior notes due 2027 (Caa1/C/CCC) were ¾ point higher on the week.

The company’s paper is still down nearly 15 points year to date, a source said.

Ardagh Group subsidiaries also reported first-quarter results on Thursday.

Ardagh Metal Packaging SA’s stock traded Thursday at $4.01 and were up 1% on Friday at $4.05, on the high side of the 52-week range of $4.09 to $2.57 but are expected to drift lower.

Truist Securities, Inc. on Thursday reiterated its hold rating and $3 price target on the shares.

“While AMBP is a pure-play beverage can producer with well-capitalized assets that trades at a valuation discount to some peers, dividend coverage is challenged due to normalizing market conditions and weaker free cash flow,” Truist Securities analyst Michael Roxland said in a note released to Prospect News.

“The company is currently facing headwinds from its hard seltzer exposure and aggressive growth the last few years,” Roxland said. “Moreover, AMBP’s growth in North America and Europe has resulted in project rephasing and weaker fixed cost absorption. In addition, AMBP has a limited float given parent company ownership thereby negatively impacting liquidity.”

The beverage can manufacturer has $3.9 billion of debt.

DISH gains on week

DISH DBS’ 7 3/8% senior notes due 2028 (Caa1/CCC) traded down ½ point to 43¾ bid in mostly light activity on Friday, a source said.

The issue was ending the week around 2¾ points higher from where the paper was quoted a week ago at 41 bid, 42 offered.

Parent EchoStar Corp. currently is seeking funding to cover $1.98 billion of debt that matures in November.

The Englewood, Colo.-based satellite owner operates DISH, HughesNet, Boost Mobile and Sling TV.

AMC first-lien notes up

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) were quoted at 68¾ bid on Friday on over $8 million of bonds traded, up about 1/8 point from Thursday and 3/8 point on the week, a source said.

The 10% senior secured second-lien notes due 2026 (Caa3/CCC-) were quiet over the session and were down over 1 point on the week.

AMC said in preliminary unaudited first-quarter results released after the markets closed on Friday that it expects total revenue to be $951.4 million versus $954.4 million a year ago.

Net losses are expected to total $163.5 million, down from net losses of $235.5 million in the same quarter last year.

Full quarterly results will be released on May 8.

AMC also reported that as of Thursday it has sold approximately 12.8 million shares of its class A common stock for proceeds of $41.8 million in its latest equity sale launched in March.

The company agreed to sell up to $250 million of class A shares with settlement of the at-the-market offering expected May 28.

The Leawood, Kan.-based movie theater company raised more than $865 million from equity sales in 2023, including $350 million in the fourth quarter.

Ardagh edges higher

Ardagh Packaging Finance’s 5¼% senior notes due 2027 (Caa1/C/CCC) traded on Friday at 51¼ bid on $9 million of volume, up ¾ point on the week, a source said.

Ardagh Group and subsidiaries reported first-quarter results on Thursday with the parent company reporting profit losses that climbed to $136 million in the quarter from $47 million of losses a year ago.

Ardagh operates four segments that include Ardagh Metal Packaging Europe, Ardagh Metal Packaging Americas, Ardagh Glass Packaging Europe & Africa and Ardagh Glass Packaging North America.

The Luxembourg-based glass and metal packaging producer secured a new senior secured credit facility with Apollo Capital Management, LP-managed investment funds and entities with plans to redeem its secured notes due in 2025.

Unit Ardagh Metal Packaging reported adjusted earnings per share of 1 cent versus Truist’s estimate of 2 cents and beat Street estimates of zero.

“Volumes increased in North America, Brazil, and Europe, which outperformed an expected volume decline,” Roxland said in the note.

Distressed returns weaker

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns fell to negative 0.91% on Thursday.

Returns were down from negative 0.14% on Wednesday, 0.64% on Tuesday and 0.33% at the start of the week.

Month-to-date total returns dropped to negative 3.34% from minus 2.45% on Wednesday, minus 2.31% on Tuesday and minus 2.94% on Monday.

Year-to-date total returns fell to negative 1.28% versus negative 0.37% the previous day, minus 0.23% on Tuesday and minus 0.87% at the week’s start.

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