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Carvana paper flirts with distressed space; Endo under pressure; Mallinckrodt softens
By Cristal Cody
Tupelo, Miss., April 28 – Carvana Co.’s new and existing notes dominated the secondary market on Thursday with the paper attracting attention in the distressed space on yields of over 9½%.
Carvana’s notes shed about ½ point to 1 1/8 points following the company’s upsized bond deal on Wednesday, sources said.
The online car retailer’s 4 7/8% senior notes due 2029 (Caa2/CCC+) fell 1 point to 75¾ bid and a 9.547% yield on $25 million of volume on Thursday.
Carvana’s new 10¼% notes due 2030 (Caa2/CCC) were quoted down 1 point at 99 bid and yielding 10.438% on hefty trading action that hit $219 million on Thursday.
“The current 29s are the fair value at a similar yield,” a source said. “Why would you pay for that? The coupon is good at 10¼%, but it needed to come with an original issue discount, and it didn’t, and now we’re seeing it trade down around the break.”
Overall secondary action in distressed issues remained light on Thursday, according to market sources.
Distressed pharmaceutical paper was active in thin trading supply, sources reported.
Endo International plc’s 6% senior notes due 2028 (Caa3/CCC-) fell 3 points to 44½ bid.
Mallinckrodt plc’s 5¾% notes due 2022 were quoted around 52¼ bid, down about ½ point on the day.
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