Exela jumps on equity offering; AMC spikes on meme stock revival; Destination XL moves up on 1Q21 earnings — Mid-Day Commentary

Exela Technologies’ debt and equity jumped after the company filed a prospectus for an at-the-market equity offering of up to USD 100m. The equity offering is meant to augment liquidity and help the company brace for potential liabilities. 

The company faces a potential liability from former stockholders of SourceHOV, as reported. Yesterday (26 May), a judge found that the stockholder plaintiffs had sufficiently pled facts that would support the application of traditional veil-piercing, as well as reverse veil-piercing in their complaint. The litigation will now move into discovery. 

If Exela is found responsible, the company must pay USD 57.7m with interest. 

On the earnings front, Exela’s woes stretch back to before the pandemic. Various creditor groups have been mobilized since 2019. An ad hoc group of term loan lenders has been working with legal counsel Gibson Dunn and financial advisor PJT Partners, while a group of crossholders had been advised by Weil Gotshal and Centerview, as reported.

Exela’s USD 350m Libor+ 650bps (1% floor) TLB due 2023 is quoted in the 37.563/39.563 context, compared to quotes at 34.667/37.417 on 24 May, according to Markit. Its USD 1bn 10% secured notes due 2023 changed hands today as high as 34.75, up from trades on 25 May at 33.75, according to MarketAxess.

The company’s equity traded as high as USD 1.62 per share and a market cap of USD 93.05m today, up from USD 1.45 per share yesterday. 

AMC Entertainment’s bonds have traded up over the last week as bullish momentum around meme stocks has returned. Adding to the list of other notable names such as GameStop and Express, AMC’s stock and bonds have skyrocketed on social media sentiment surrounding the movie theater conglomerate. 

Although AMC appears to have avoided a Chapter 11 filing in the short term, staying out of bankruptcy in the coming year may prove to be challenging, as reported by Debtwire. This is because AMC still has other issues that it needs to address in order to avoid a Chapter 11 down the road, namely its lease obligations. 

AMC’s USD 1.528bn 12% second lien notes due 2026 traded today (27 May) at 96.25 to yield 12.976%, up from trades at 91.75 to yield 14.28% last week, according to MarketAxess. The USD 98m 5.75% senior subordinated notes due 2025 traded today at 74.5 to yield 14.271%, up from trades at 71 to yield 15.684% on 24 May. 

The company’s equity shot up to USD 23.15 per share and a market cap of USD 10.48bn, up 18.35% from yesterday’s close and up 91.6% from Friday’s close. 

Destination XL’s stock shot up this morning after the retailer reported strong 1Q21 financial results and provided updated guidance for the year.

Adjusted EBITDA for the quarter was at USD 13.7m versus negative USD 18.9m year-over year.

Total sales for the quarter were up 94.8% to USD 111.5m compared to the same period last year and down 1.3% from 1Q19. Meanwhile, same store sales increased by 3.7% in 1Q21 compared to 1Q19.

Free cash flow was USD 7m compared to a cash burn of USD 18.4m in 1Q20 and USD 20.2m in 1Q19.

Its stock is up 13.5% from previous close to trade at USD 2.78 with a USD 173.6m market cap.

Carnival’s bonds traded up this week on the rising expectation of increased travel as widespread COVID-19 vaccine roll-out continues throughout the country.

Today, the cruise operator was also able to reprice its debt, based on turnaround expectations. It repriced its USD 1.9bn and EUR 794m term loan B both due 2025 after launching the process last week. The USD 1.9bn loan was priced at Libor+ 300bps (0.75% floor) and the EUR 794m term loan was priced at Euribor+ 375bps. The USD loan was paying L+ 750bps with a 1% floor and the EUR loan was paying E+ 750bps with a 0% floor prior to the repricing.

Its USD 3.5bn 5.75% senior unsecured notes due 2027 changed hands at 106.625 today for a 4.381% yield compared to 104.5 for a 4.811% yield on 20 May, according to MarketAxess.

2021 Debtwire

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: