Endo pharma bonds trade mixed; Rite Aid paper edges higher; AMC secured issue softens

By Cristal Cody

Tupelo, Miss., May 16 – Distressed paper in the health care space continued to grab attention in the secondary market on Monday.

Endo International plc’s bonds were mixed in heavy trading as the company faces bankruptcy reports.

The pharmaceutical company’s 6% senior notes due 2028 picked up 1¼ points during the session but remained in the teens.

Drug retailer Rite Aid Corp.’s paper was modestly higher on Monday after the company’s bonds and credit default swap spreads softened last week.

Rite Aid’s 8% senior secured notes due 2026 traded up ¼ point.

Market tone was mixed with equities mostly weaker and volatility lower on the day.

The iShares iBoxx High Yield Corporate Bond ETF fell 11 cents to $76.70.

The Chicago Board Options Exchange’s CBOE Volatility index dropped 4.85% to 27.47 after falling below a 30 handle on Friday.

In other strong trading action on Monday, AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 declined to a 69 handle over the day.

Endo bonds mixed

Endo’s 7½% senior secured notes due 2027 (B3/B-) dipped 1/8 point to 76 5/8 bid in a session that saw $18 million of volume, a source said Monday.

The company’s 6% senior notes due 2028 (Caa3/CCC-) picked up 1¼ points during the session but remained in the teens at 15¼ bid.

Endo’s paper plunged earlier in May after the company recorded a first-quarter loss and provided limited financial guidance.

Due to uncertainty, the company only provided financial guidance for the second quarter ending June 30 and projects a loss from continuing operations of 15 cents to 17 cents a share on $500 million to $525 million of revenue.

The Dublin-based pharmaceuticals maker has settled several opioid-related lawsuits year to date, including with Alabama, San Francisco and Florida.

Rite Aid edges higher

Rite Aid’s paper kicked Monday off slightly higher after the company’s bonds and credit default swap spreads softened last week.

The company’s 8% senior secured notes due 2026 (B3/CCC/BB-) moved up ¼ point by late afternoon to 76½ bid on $11 million of paper traded, a source said.

The notes were down 1¼ points on Friday and ended the week about 5 points lower.

Rite Aid’s notes were trading Monday about 8 points lower on the month.

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

AMC softens

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) were quoted trading down ¾ point on Monday at 69 bid.

Volume was steady at $11 million, according to the market source.

The notes went out Friday 5/8 point higher but about 15 points weaker since April.

The Leawood, Kan.-based movie theater owner and gold and silver mine investor reported improved first-quarter revenue and earnings a week ago.

Distressed index returns

The S&P U.S. High Yield Corporate Distressed Bond index improved on Friday.

One-day total returns rose to 0.23%, compared to minus 1.42% on Thursday, minus 0.66% on Wednesday, minus 0.93% on Tuesday and minus 1.41% at the prior week’s start.

Month-to-date total returns were at minus 7.92% on Friday, minus 8.12% on Thursday, minus 6.8% on Wednesday, minus 6.18% on Tuesday and minus 5.29% on May 9.

Year-to-date index returns came to minus 15.18% on Friday, minus 15.37% on Thursday, minus 14.15% on Wednesday, minus 13.58% on Tuesday and minus 12.76% at the start of the week.

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