Carnival dominates secondary, notes, CDS spreads weak; Rite Aid edges up; Embarq better

By Cristal Cody

Tupelo, Miss., Sept. 30 – Paper from Royal Caribbean Group and Carnival Corp. dominated secondary action in the junk and distressed markets in otherwise mostly light trading on Friday.

Carnival’s paper dropped about 2¼ points to more than 6 points in trading totaling more than $68 million, a source said.

The heavy trading focus followed Carnival’s third-quarter business update on Friday.

Carnival’s 10½% senior notes due 2030 (B3/B) went out Friday down 5 points at 81½ bid, a source said.

The bonds were among the most active paper traded during the session on more than $23 million of secondary volume.

The cruise operator’s credit default swap spreads also widened nearly 200 basis points this week.

Rite Aid Corp.’s 7.7% senior debentures due 2027 (Caa2/CCC-/CCC) clawed back ½ point in light trading after sliding 7 points on Thursday following the retailer’s weak second-quarter earnings report.

The bonds were quoted at 59½ bid in light trading.

Embarq Corp.’s 7.995% notes due 2036 (Caa2/BB/BB) also improved about 1½ points on Friday in light volume, a source said.

The notes went out at the 51½ bid area.

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