AMC notes decline, dominate distressed trading; Credit Suisse lower; Embarq edges down

By Cristal Cody

Tupelo, Miss., Oct. 12 – AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) dominated secondary trading on Wednesday with the issue seen at the top of the top-traded junk and distressed issues.

Volume hit nearly $60 million.

The bonds sank more than 4 points as an AMC subsidiary started marketing for a new $400 million offering of five-year senior secured notes.

AMC’s 10% notes were trading Wednesday with a yield of 28.7%.

The company’s other junk paper was trading down about 4 points to 4½ points, a source said.

Markets finished Wednesday mixed after the release of the Federal Reserve minutes and new junk paper priced.

The iShares iBoxx High Yield Corporate Bond ETF rose 14 cents, or 0.19%, to $71.60.

The CBOE Volatility index drifted down 0.59% to 33.43 by late afternoon.

Oil softened a second day.

West Texas Intermediate crude oil benchmark futures for November deliveries declined $2.08 to settle at $87.27 a barrel.

Secondary trading in other issues was fairly thin, a source said.

Credit Suisse Group AG’s 9¾% perpetual securities (B+) dropped more than 3 points on less than $1 million of secondary supply.

Embarq Corp.’s 7.995% notes due 2036 (Caa2/CCC/CCC) were little changed in thin trading on Wednesday following a downgrade from S&P Global Ratings.

AMC declines

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) dropped more than 4 points on the day to a low 59 handle by the close, a source reported.

Volume totaled $56.45 million.

The bonds traded as low as 55¼ bid during the session.

AMC indirect subsidiary Odeon Finco plc started marketing a $400 million offering of five-year senior secured notes on Wednesday. The issue is expected to price before the end of the week.

Initial guidance has the bonds coming with a 12¾% coupon at OID 95 to 96.

AMC previously announced in late September that it plans to sell up to 425 million of its new preferred equity units.

The Leawood, Kan.-based movie theater owner and gold and silver mine investor’s common stock fell 4.41% to $5.85 on Wednesday.

Credit Suisse lower

Credit Suisse’s junk paper continued to decline after skidding over the prior week, but trading was thin, a source said.

The 9¾% perpetual securities (B+) went out more than 3 points weaker on an 89 handle on less than $1 million of secondary supply.

Credit Suisse’s paper declined about 5¾ points to more than 10 points in the prior week on restructuring fears.

Credit Suisse International on Friday announced a cash tender offer for up to $2 billion of notes from 12 tranches of securities, as well as a tender offer for up to €1 billion of euro and sterling notes.

The Zurich-based financial services company plans to release third-quarter earnings results on Oct. 27.

Embarq mostly flat

Embarq’s 7.995% notes due 2036 (Caa2/CCC/CCC) traded flat to less than ¼ point lower at 44 3/8 bid by late Wednesday, a market source said.

Trading was light on $1 million of volume.

S&P said Wednesday it dropped the notes to CCC from BB following the completion of the Overland Park, Kan.-based telecommunications company’s acquisition from Lumen Technologies Inc. by Connect Holding II LLC, doing business as Brightspeed.

Distressed index lower

S&P U.S. High Yield Corporate Distressed Bond index one-day returns widened on Tuesday to minus 0.93% at the start of the short holiday week.

One-day returns were down from minus 0.62% on Friday and a positive 1.06% in the same session a week ago.

Month-to-date total returns softened to minus 0.12% on Tuesday from 0.82% on Friday and 1.54% in the week-ago session.

Year-to-date total returns declined to minus 26.3% versus minus 25.61% on Friday and minus 25.08% the same day last week.

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