November 15th 2020
Currently tracking 175 credits from 9 companies.
If you wish to view the Distressed Watchlist within Google Sheets, please request access to it and I will shortly grant you access to it.
Leaders for the last 2 weeks
Laggards for the last 2 weeks
I skipped pricing the distressed watchlist last weekend but I am kind of glad I did. Seeing movements bi-weekly instead of weekly can show some larger trends.
Revlon Consumer Products (REV)
The largest winner this past week was REV finally getting enough of the 2021 bondholders to exchange, allowing the company to avoid bankruptcy for now.
The REV 5.75 2021 remaining holdouts will get taken out at par plus accrued after the exchange is completed. It is a huge home run for them as these notes traded in the 30s for the last month or so. It has also been positive for the longer-dated REV bonds as they rose from the low teens to the high 20s.
AMC Entertainment (AMC)
With positive news of a Covid vaccine getting closer, the capital structure rebounded from its lows. The 1st lien notes moved higher by 15pts to 69 while the second liens are now back in the teens instead of single digits.
Norwegian Cruises (NLCH)
This cruise liner traded higher over the past week on the back of the same positive vaccine news. The secured notes are now trading around 115 while the unsecured notes traded up 16 points to 85.00 to yield 8.6%. I will be removing these credit from the list next week.
Peabody Energy (BTU)
The coal producer continues to see weakness across the capital structure. The 1st liens BTU 6.00 '22 are now trading at 41.00 while the stock continues to decline.
Cooper-Standard Auto (CPS)
After stellar earnings report, the stock and bonds have rallied strong. The unsecured notes which bottomed to 50 this summer when I last wrote about this credit has now traded up to 79.00 yielding 10.5%. The stock has now regained all its losses for the year.
The number of distressed credits within the watchlist has decreased by a third since the middle of the summer. Many names are recovering from their lows while others are completing restructuring leaving very little new credits to review. Over the next few weeks I will searching for some new credits to follow. If you have any suggestions, please send them my way.