AMC debt climbs on theater reopenings; Spirit flies high on the break as Macy’s bonds retrench from rally — Mid-Day Commentary

AMC debt continued its climb this week after the entertainment company announced its plans to open an additional 140 locations by tomorrow (4 September). 

Including this round of re-openings, AMC will have resumed operations at 420 locations by the end of the week, which is around 70% of its overall theater count in the country. This morning, the borrower also announced plans to reopen all 27 New Jersey locations by 10 September.  

Its USD 500m 10.5% senior secured notes due 2025 traded up to 92 this morning yielding 12.849%, from 90.813 yesterday (2 Sept) and 82.75 on 17 August prior to the announcement. 

Spirit Airlines‘s upsized offering of USD 850m senior secured bonds due 2025 traded up on the break to the 103.5/104 context after pricing with an 8% coupon and a 98.876 OID, according to two sources familiar with the situation.

The notes traded as high as 104.125 to yield 6.87% yesterday before settling at prints of 103.75 to yield 6.979%, according to MarketAxess. 

The notes are being issued through Spirit’s subsidiaries Spirit IP Cayman and Spirit Loyalty Cayman. Sources following the deal said Spirit could bounce back from the pandemic quicker than peers such as United due to its low-cost offerings, as reported by Debtwire.

Proceeds will be upstreamed to Spirit to bolster liquidity and fund general corporate purposes, after a portion is deposited in a reserve account.

On the earnings front, Macy’s retrenched a bit today after staging a rally on yesterday’s earnings. The retailer posted a boost in online sales and beat quarterly expectations. The department store’s digital sales rose 53% from the same period last year, leading to revenue of USD 3.56bn, compared to an expected USD 3.48bn. The company also posted a loss per share of USD 81 cents, compared to an expected USD 1.77 loss per share. 

Macy’s USD 500m 3.625% senior unsecured notes due 2024 traded as high as 79.5 to yield 10.371% yesterday (2 September) from trades at 75.528 to yield 11.911% on 1 September before the earnings report, according to MarketAxess. The notes settled today at 78.5 to yield 10.771%.

2020 Debtwire

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