Bausch Health, AMC, Diebold Nixdorf improve; Rite Aid notes, CDS spreads soften

By Cristal Cody

Tupelo, Miss., May 13 – Distressed paper remained active on Friday in a session mostly dominated by junk paper from Carvana Co. and Coinbase Global, Inc.

Bausch Health Cos. Inc.’s senior notes rose about 1½ points to over 2 points across most of the company’s bond structure following a downgrade from Moody’s Investors Service and a weak first-quarter earnings report.

AMC Entertainment Holdings, Inc.’s bonds were quoted about 5/8 point to 2½ points higher on the day after declining 3½ points in heavy trading on Thursday.

Diebold Nixdorf Inc.’s notes also were better during the session.

The 8½% notes due 2024 (Caa1/CCC-) recovered 3½ points after sinking over 30 points on Tuesday on weak earnings and lower 2022 guidance.

Market tone was improved on Friday as volatility dropped headed into the weekend.

The iShares iBoxx High Yield Corporate Bond ETF edged up 8 cents to $76.80.

The Chicago Board Options Exchange’s CBOE Volatility index fell below a 30 handle, declining 9.13% to 28.87.

Meanwhile, Rite Aid Corp.’s 8% senior secured notes due 2026 (B3/CCC/BB-) were ending the week about 5 points lower after declining Friday 1¼ points.

The drug store chain’s credit default swap spreads also widened about 800 bps over the past week.

Bausch Health active

Bausch Health’s paper rose about 1½ points to over 2 points in active trading across most of the company’s bond structure on Friday, a source said.

The company’s 5% senior notes due 2028 (B3/B/B) went out 2½ points better at 58½ bid.

The notes saw $3 million of trading supply.

Bausch Health’s 7¼% senior notes due 2029 (B3/B/B) improved 1½ points to hit 61 bid on $3 million of volume.

On Friday, Moody’s said it dropped the company to Ba3 from Ba2.

The Laval, Quebec-based pharmaceutical company reported weak first-quarter earnings on Tuesday.

AMC edges higher

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) were 5/8 point higher at 69 5/8 bid as Friday’s session wound down, a source said.

Trading volume was strong at $16 million but moderated from the $42 million of supply seen Thursday when the notes dropped 3½ points.

The issue has declined about 15 points since April.

On Monday, the Leawood, Kan.-based movie theater owner and gold and silver mine investor reported first-quarter revenue and losses that improved from a year ago.

Diebold Nixdorf up

Diebold Nixdorf’s 8½% notes due 2024 (Caa1/CCC-) rallied 3½ points on Friday to 44½ bid in a second consecutive day of gains after plunging earlier in the week, a source said.

The issue saw $5 million of volume.

The company’s bonds were about 1½ points better on Wednesday after sinking over 30 points in Tuesday’s session.

The notes traded at the 72 bid area on Monday.

Diebold Nixdorf’s 9 3/8% senior secured notes due 2025 (B2/CCC+) also were active on Friday, trading at 77 bid on $11 million of supply.

The Hudson, Ohio-based financial technology company on Tuesday reported a wide first-quarter loss and released a revised and lower outlook for fiscal 2022 revenue.

Rite Aid weaker

Rite Aid’s bonds and CDS spreads were soft over the week, market sources reported.

The company’s 8% senior secured notes due 2026 (B3/CCC/BB-) continued to see pressure on Friday with the notes down 1¼ points at 76¼ bid.

The issue was about 5 points lower on the week.

The Camp Hill, Pa.-based drug retailer’s CDS spreads widened over 800 bps in the past week ended Wednesday to 2,966 bps.

Distressed index down

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns weakened to minus 1.42% on Thursday, compared to minus 0.66% on Wednesday, minus 0.93% on Tuesday and minus 1.41% on Monday.

Month-to-date total returns declined to minus 8.12% from minus 6.8% on Wednesday, minus 6.18% on Tuesday and minus 5.29% at the start of the week.

Year-to-date index returns also fell Thursday to minus 15.37% from minus 14.15% on Wednesday, minus 13.58% on Tuesday and minus 12.76% on Monday.

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