Revlon bonds crack 200% yield area; Rite Aid higher; Bausch down; Cooper-Standard up

By Cristal Cody

Tupelo, Miss., June 15 – Secondary action slowed in distressed paper on Wednesday as the financial markets braced for the Federal Reserve’s rate decision with equities finishing stronger on the largest hike since 1994.

The Federal Reserve raised interest rates by 75 basis points to put the benchmark Federal Funds rate at 1½% to 1¾%.

The bulk of the day’s trading volume was from emerging markets issuers, a source said.

One name that was causing buzz in the distressed space was Revlon Inc.

The cosmetics manufacturer’s bonds have sunk over the past week on reports of an imminent Chapter 11 bankruptcy filing.

Revlon’s 6¼% senior notes due 2024 (C/C) were trading below a 10 handle, down over 15 points since last week.

“That cracks the 200% yield mark,” a source said.

Looking at other distressed paper, Rite Aid Corp.’s notes were about 1 7/8 points to over 2 points higher on Wednesday following a downgrade from S&P Global Ratings.

Stocks turned higher by the day’s end.

The iShares iBoxx High Yield Corporate Bond ETF climbed 1.94% to $75.01.

Market volatility was down about 10% with the Chicago Board Options Exchange’s CBOE Volatility index retreating below a 30 handle to 29.62.

Bausch Health Cos. Inc.’s 5% senior notes due 2029 (B3/B-/B) dropped 1½ points in one of the more active names seen in the distressed space on Wednesday on $6 million of secondary volume.

Meanwhile, Cooper-Standard Automotive Inc.’s 5 5/8% senior notes due 2026 (Caa2/CCC-) were trading 1 point higher this week.

“That’s where it’s been the last couple of days,” a source said. “That’s after the news.”

Cooper-Standard Holdings Inc. on Tuesday reported it had retained Goldman Sachs & Co. LLC as a financial adviser to assist in evaluating potential alternatives for refinancing its capital structure.

The Northville, Mich.-based supplier of sealing and fluid handling systems and components in May reported a wide 2021 fourth-quarter loss.

Revlon bonds weak

Revlon Consumer Products Corp.’s 6¼% senior notes due 2024 (C/C) were last seen Wednesday at 8½ bid at the close, up from 5 bid on Tuesday, a source said.

The bonds carried yields in the 200%-plus range over the session on Wednesday, up from the 175% area on Friday.

The issue was quoted at the start of the last week at the 25 bid area before ending the week down 15 points.

In May, Revlon reported first-quarter earnings and revenue were up from a year ago.

The New York-based cosmetics manufacturer’s stock jumped 20.32% to close at $2.25.

Rite Aid higher

Rite Aid’s 7.7% senior debentures due 2027 (Caa2/CC/CCC) traded over 2 points higher in odd lots at the 69 bid area, a source said.

The notes have gained over 4 points since Monday.

On Monday, Rite Aid announced tender offers to purchase up to $150 million of its 7½% senior secured notes due 2025, 8% senior secured notes due 2026, 7.7% senior debentures due 2027 and 6 7/8% debentures due 2028.

Rite Aid’s 8% senior secured notes due 2026 (B3/CC/BB-) also rose 1 7/8 points to 79 3/8 bid in light trading on Wednesday.

The tender offers expire July 12.

On Wednesday, S&P downgraded the Camp Hill, Pa.-based drug retailer, referencing the below-par cash tender offer that it views as a distressed exchange.

Bausch Health lower

One of the more active distressed names seen Wednesday was Bausch Health, a source said.

The company’s 5% senior notes due 2029 (B3/B-/B) dropped 1½ points to trade near 58 bid on $6 million of secondary supply.

Moody’s and S&P downgraded the company in May.

The Laval, Quebec-based pharmaceutical company reported weak first-quarter earnings in the prior month.

Cooper-Standard up

Also Wednesday, Cooper-Standard’s 5 5/8% senior notes due 2026 (Caa2/CCC-) were quoted at the 49, 49¼ bid context.

“It’s up a point,” a source said.

The notes were trading well off the 80 handle seen at the start of the year.

Cooper-Standard said in the release on Tuesday that it expects its current liquidity position to support ongoing operations for the foreseeable future.

As of March 31, the company had total liquidity of $395.6 million.

Distressed returns weak

The S&P U.S. High Yield Corporate Distressed Bond index improved on Tuesday from Monday’s sell-off.

One-day total returns were minus 0.51%, up from minus 2.37% on Monday.

Monthly and annual returns remained weak.

Month-to-date total returns declined to minus 4.2% from minus 3.71% at the week’s start.

Year-to-date index returns fell Tuesday to minus 18.11% from minus 17.69% on Monday.

© 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.