AMC bonds, stock mostly down on preferred plans; Rite Aid paper up; Bausch Health climbs

By Cristal Cody

Tupelo, Miss., Aug. 14 – AMC Entertainment Holdings, Inc.’s bonds went out flat to weaker while its stock plummeted 35% on Monday in the first session after the company announced the court approval of its shareholder settlement and intention to wipe out its preferred equity holders.

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) dropped 3 points on $9 million of trading, while its 7½% senior secured first-lien notes due 2029 (Caa1/B-) went out flat on $7 million of volume.

AMC’s common stock plunged over 35%.

Market tone stayed positive on Monday with stock indices mostly higher.

The Nasdaq rose 1.05% on the day.

The CBOE Volatility index slipped 0.13% to 14.82.

The iShares iBoxx High Yield Corporate Bond ETF was nudged down 1 cent, 0.01%, to $74.82.

Rite Aid Corp.’s 8% senior secured notes due 2026 (Caa3/CCC-/B) also were active over the session, trading under 1/8 point higher on $8 million of volume.

Bausch Health Americas, Inc.’s paper rallied Monday in one of the most active distressed names during the session, a source reported.

The bonds traded about 1 point to more than 5 points better on over $17 million of volume.

AMC notes mixed

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) dropped 3 points to head out at 77 bid on $9 million of trading on Monday, a source said.

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) went out flat at 73½ bid on $7 million of secondary volume.

AMC announced in regulatory filings on Monday that the Delaware Court of Chancery approved the settlement of a shareholder lawsuit brought by Allegheny County Employees’ Retirement System over the company’s issuance of preferred stock and lifted the status quo order on Friday.

The company quickly moved to increase the total number of authorized shares of its class A common stock and effect a reverse stock split at a ratio of one share of class A common stock for every 10 shares of class A common stock effective Aug. 24.

The reverse stock split and share increase will allow the conversion of all of AMC’s outstanding preferred equity units into shares of class A common stock.

AMC said it expects the APEs to be delisted from the New York Stock Exchange and cease trading on Aug. 25.

The company said it will make a settlement payment of one share of class A common stock for every 7½ shares of class A common stock owned by the settlement payment recipients as of Aug. 24.

AMC’s bonds remained up from trading in the high 60s last week ahead of its earnings report.

Last week, AMC on Tuesday reported its strongest second quarter in four years.

The company also said it raised around $34 million in cash through the sale of its APE units during the second quarter.

The Leawood, Kans.-based movie theater owner’s common stock (NYSE: AMC) sank 35.55% to $3.39 on volume totaling about 132 million shares. Average volume is 24.4 million shares.

AMC’s preferred stock (NYSE: APE) climbed 16.29% to $2.07 on 124 million shares traded, compared to average volume of 13.9 million shares.

Rite Aid bonds active

Rite Aid’s 8% senior secured notes due 2026 (Caa3/CCC-/B) traded less than 1/8 point higher with a 57 bid handle on $8 million of volume on Monday, a source said.

The bonds went out Friday down ¼ point at 57 bid on $8 million of secondary activity and gave back 1¼ points on Thursday on $2 million of trading.

Rite Aid’s notes were higher at the start of the week, though, and the bonds went out about 5 points better on the week.

The Camp Hill, Pa.-based drugstore chain’s stock (NYSE: RAD) dropped 11.26% on Monday to $2.05 in light trading.

Bausch higher

Bausch Health Cos. Inc.’s 11% senior secured notes due 2028 (Caa1/CCC+/B) were up 1 point on Monday at 72 bid in strong trading totaling $10.4 million, a source said.

The bonds were among the most active junk notes traded.

Bausch’s 9¼% senior notes due 2026 (Ca/CCC-/CC) also traded around 5½ points higher with an 89 bid handle on $7.5 million of volume.

On Monday, law firm Kessler Topaz Meltzer & Check, LLP announced that a securities class action lawsuit has been filed against Bausch Health, alleging violations of federal securities laws, including omissions and fraudulent misrepresentations regarding the company’s business, operations and prospects.

The Laval, Quebec-based pharmaceutical company’s common stock (NYSE: BHC) closed up 0.12% to $8.42 in thin trading.

Distressed returns lower

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns softened on Friday to minus 0.07% from 0.18% on Thursday, 1% on Wednesday, 0.3% on Tuesday and 0.35% at the start of the prior week.

Month-to-date total returns fell to 1.62% from 1.69% on Thursday, 1.5% midweek, 0.49% on Tuesday and 0.2% at the week’s start.

Year-to-date distressed total returns decreased on Friday to 16.79% from 16.88% on Thursday but remained up from 16.66% on Wednesday, 15.5% on Tuesday and 15.16% at the start of the previous week.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.