Mallinckrodt moves higher; Endo senior notes weaken; Bed Bath & Beyond lower; CURO off

By Cristal Cody

Tupelo, Miss., May 25 – Distressed pharmaceutical paper went out mixed on Wednesday in mostly light secondary market action.

Mallinckrodt plc’s 5½% senior notes due 2025 climbed 3¾ points.

Endo International plc’s paper continued to soften.

Endo’s 6% senior notes due 2028 have slid over 35 points since the pharmaceutical manufacturer posted weak first-quarter earnings earlier in the month.

In other issues active Wednesday, CURO Group Holdings Corp.’s 7½% senior secured notes due August 2028 were trading down 1 point and with a handle in the low 70s.

Bed Bath & Beyond Inc.’s 3.749% senior notes due 2024 also shed ¾ point over the session.

Secondary action has been light in the distressed space ahead of the Memorial Day holiday, sources report.

Market tone improved on Wednesday as equities finished higher and measured volatility declined after the release of the minutes from the Federal Reserve’s monetary policy meeting held this month.

The iShares iBoxx High Yield Corporate Bond ETF jumped $1.17 to $78.39.

Elsewhere, S&P Global Ratings said in a report on Wednesday that downgrade risks for 2023 are building from the impact of interest rate and EBITDA stresses on U.S. speculative-grade companies.

“In 2022, our ratings should be relatively resilient in a moderate stress environment, but we expect the proportion of U.S. speculative-grade issuers with negative outlooks will trend back to historical levels in the 20%-25% area from about 15% today,” S&P credit analyst Minesh Patel said in a news release.

Mallinckrodt perks up

Mallinckrodt’s 5½% senior notes due 2025 added 3¾ points by the end of Wednesday’s session, according to a market source.

The bonds were quoted at 39 bid on $2 million of secondary supply.

The issue traded on Tuesday at 35¼ bid, down nearly 20 points from where the paper was last seen at the start of the month.

The Dublin- and St. Louis-based pharmaceutical company reported on Friday plans to issue $650 million of new 11½% 6.5-year first-lien senior secured notes before the effective date of its Chapter 11 plan of reorganization.

Endo trades lower

Endo Finance LLC’s 6% senior notes due 2028 (Caa3/CC) fell ¾ point to head out at 8 bid, a market source said.

Volume was on the light side with $1 million of supply seen.

The bonds have slid more than 35 points since the start of the month as the company faces reports of a potential restructuring.

Endo International earlier in May reported a first-quarter loss and projects a second-quarter loss.

S&P downgraded the company and lowered the ratings on its term loan and notes on Friday.

The Dublin-based pharmaceuticals maker has settled several opioid-related lawsuits in 2021 and 2022, including with Alabama, San Francisco and Florida.

CURO notes lower

CURO Group’s 7½% senior secured notes due August 2028 (Caa1/CCC+) traded down 1 point to 71¾ bid on light supply totaling $1 million on Wednesday, a market source said.

The bonds have declined from trading at better than par early in the year.

The Wichita, Kan.-based consumer credit provider sold $750 million of the notes on July 16, 2021 at par.

Bed Bath & Beyond dips

Bed Bath & Beyond’s 3.749% senior notes due 2024 (B3/B+) dropped ¾ point by late afternoon to 70 bid, a source said.

The issue saw $3 million of volume.

The Union, N.J.-based home products retailer in April reported fourth-quarter losses following difficulty in securing inventory.

Distressed bond index down

The S&P U.S. High Yield Corporate Distressed Bond index softened on Tuesday as volatility ramped up in the financial markets.

One-day total returns declined to minus 0.31% from 0.19% at the start of the week.

Month-to-date total returns were at minus 9.8%, compared to minus 9.52% on Monday.

Year-to-date index returns softened to minus 16.91% on Tuesday from minus 16.66% at the week’s start.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.