Qurate Retail, QVC notes decline; Bed Bath & Beyond paper soft; Michaels improves

By Cristal Cody

Tupelo, Miss., June 14 – Distressed retail paper remained mostly weak in secondary action on Tuesday.

Qurate Retail Inc.’s 8½% senior debentures due 2029 (B2/B) were trading down about 3 points by late afternoon after shedding about 2½ points on Monday.

Paper from the shopping network owner’s subsidiary, QVC Inc., also was weaker.

Bed Bath & Beyond Inc.’s senior notes (B3/B+) were mixed over the day but trading about 15 points to over 20 points lower since April.

The retailer’s 5.165% senior notes due 2044 (B3/B+) were quoted with a high 30s handle by the day’s end.

Meanwhile, arts and crafts retailer Michaels Cos., Inc.’s 7 7/8% senior notes due 2029 (B3/CCC+) recovered ¾ point during the session.

99 Cents Only Stores LLC’s 7½% senior secured notes due 2026 (Caa2/B-) were quiet after trading mostly flat on Monday.

S&P Global Ratings said in a report on Monday that retail led a jump in the distress ratio for the month ended June 3, with the retail sector rising to 15.9% from 4.5% in the prior month.

The financial markets saw some relief on Tuesday after Monday’s wide sell-off.

The iShares iBoxx High Yield Corporate Bond ETF, which sank $2.53 on Monday, rose 48 cents to $73.48 on Tuesday.

Stocks pulled back from Monday’s losses as investors continued to digest the Labor Department’s latest inflation data and await the Federal Reserve’s rate decision on Wednesday. The Nasdaq finished up 0.18% after dropping 4.68% on Monday.

The Chicago Board Options Exchange’s CBOE Volatility index retreated slightly after shooting up 25% in the prior session, going out Tuesday down 4.2% at 32.59.

Qurate, QVC lower

Qurate Retail’s 8½% senior debentures due 2029 (B2/B) issued by Liberty Media Corp. were trading down about 3 points by late afternoon Tuesday after shedding about 2½ points on Monday, a source said.

The issue was quoted at the 69 bid area, down from the 91 bid range in April.

The home shopping network owner’s bonds have been under pressure since the company announced a first-quarter loss and soft revenue.

The West Chester, Pa.-based media company, formerly known as Liberty Interactive Corp., operates retailer brands including QVC and HSN.

Qurate Retail held a virtual annual stockholders meeting on Tuesday.

Meanwhile, QVC’s cash tender offer for all $750 million of its 4 3/8% senior secured notes due 2023 expires on Wednesday.

QVC’s longer-dated issue, the 4 3/8% senior secured notes due 2028 (Ba2/BB+), was trading Tuesday about 2½ points weaker at a print of 75.3 by the close.

The bonds have declined about 6 points since Friday.

Bed Bath & Beyond mixed

In other distressed retail paper, Bed Bath & Beyond’s 3.749% senior notes due 2024 (B3/B+) fell about ¼ point to 72½ bid by the day’s close, a market source reported.

Bed Bath & Beyond’s 4.915% notes due 2034 (B3/B+) were mostly flat at the 50 bid area after trading down to the 45 bid area over the day.

The company’s 5.165% senior notes due 2044 (B3/B+) were trading near lows seen in March 2020. The bonds were quoted Tuesday at 39 bid, about 1 point higher on the day.

The company’s bonds have declined about 15 points to over 20 points since April.

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

Michaels higher

Michaels’ 7 7/8% senior notes due 2029 (B3/CCC+) recovered ¾ point on Tuesday to head out at 68½ bid, a source said.

The bonds softened 1¼ points on Monday and were trading about 5 points softer since May.

The Irving, Tex.-based arts and crafts retailer was taken private by funds managed by Apollo Global Management, Inc. affiliates following a cash tender offer for Michaels’ stock in April 2021.

99 Cents quiet

99 Escrow Issuer Inc.’s 7½% senior secured notes due 2026 (Caa2/B-) were last seen in the secondary market on Monday at a print of 71.65, a market source said.

The bonds were mostly unchanged from Friday after ending the prior week about 2 points higher.

The discount retailer is based in Commerce, Calif.

Distressed index slides

The S&P U.S. High Yield Corporate Distressed Bond index sank amid the volatility on Monday.

One-day total returns slid to minus 2.37%, compared to minus 0.95% on Friday and a 0.27% return the same day a week ago.

Month-to-date total returns dropped to minus 3.71% versus minus 1.38% on Friday and 0.49% last week.

Year-to-date index returns declined to minus 17.69% on Monday. Yearly returns totaled minus 15.69% on Friday and minus 14.1% in the week-ago session.

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