Frontier drops; Qurate, QVC paper mixed; Coca-Cola, Verizon soft; Country Garden down

By Cristal Cody

Tupelo, Miss., June 22 – Frontier Communications Holdings LLC’s bonds were back on the distressed radar in heavy trading action on Wednesday.

The company’s notes went out about 1 point to 1 7/8 points lower on the day.

Frontier’s 6% senior notes due 2030 (Caa2/CCC+) that priced at par back in October were trading with a 70s handle.

In other distressed paper, Qurate Retail Inc.’s 8½% senior debentures due 2029 (B2/B) improved about 2¼ points by the end of the day.

Credit default swap spreads from Qurate, formerly known as Liberty Interactive Corp., have been wider in June.

The 5.45% senior secured notes due 2034 (Ba2/BB+) from the shopping network owner’s subsidiary, QVC Inc., fell more than ¾ point over the day.

Market tone was mixed on Wednesday as stocks moved modestly lower and measured volatility declined.

The iShares iBoxx High Yield Corporate Bond ETF softened 0.08% to $73.94.

Elsewhere, trading action has been strong in high-grade paper carrying distressed handles, according to market sources.

Coca-Cola Co.’s 2½% senior notes due 2040 (A1/A+) have come back from an all-time low of 75½ bid on June 14 but are still trading with a handle in the 70s, a source said.

The bonds were about ½ point better at the 78¼ bid area on Wednesday afternoon after heavy volume on Tuesday sent the notes up nearly ¼ point.

Also, Verizon Communications Inc.’s 3.4% notes due 2041 (Baa1/BBB+) fell ½ point to a print of 80.41 in heavy trading action on Tuesday, yielding 5.02%.

The notes were up about ¼ point near the 80¾ bid area on Wednesday, a source said.

Verizon’s notes were down over 6 points since May.

Offshore China property developer bonds were active on Wednesday as China Evergrande Group prepares to announce a restructuring plan.

Bonds were mixed with paper from China Evergrande higher, while Country Garden Holdings Co. Ltd.’s notes came under pressure after the property developer was dropped to junk.

Frontier at 70s handle

Frontier Communications’ 6% senior notes due 2030 (Caa2/CCC+) fell more than 1 point to 78 7/8 bid on $19 million of trading action on Wednesday, according to a market source.

Frontier and Frontier Communications Parent, Inc. priced $1 billion of the notes in October at par.

The Norwalk, Conn.-based telecommunications company exited Chapter 11 bankruptcy in 2021 and eliminated more than $10 billion of debt in its restructuring plan.

Qurate, QVC mixed

Qurate Retail’s 8½% senior debentures due 2029 (B2/B) issued by Liberty Media were trading late afternoon up about 2¼ points at the 71¼ bid area, a source said.

The bonds were down about 1 point on Tuesday.

The issue has declined 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., saw its CDS spreads ease 145 bps in the prior week to 1,546 bps, according to a market source.

Meanwhile, QVC’s 5.45% senior secured notes due 2034 (Ba2/BB+) softened more than ¾ point to the 71 bid area in light trading on Wednesday, a source said.

The notes opened the week over 1 point lower and are down about 7 points since May.

China property developers

China Evergrande Group’s 8¾% notes due 2025 climbed 1 7/8 points to 9½ bid from where the issue was last seen active in the offshore secondary bond market on Friday, a source said.

The Shenzhen, China-based real estate developer is expected to release a restructuring plan before the end of July.

Country Garden’s 5 5/8% senior notes due 2026 traded Wednesday at 52 bid, down more than 10 points from where the issue last moved in May, a source said.

Moody’s Investors Service reported on Wednesday that it dropped Country Garden to junk.

Meanwhile, Greenland Global Investment Ltd.’s offshore bonds were not seen trading over the session.

S&P Global Ratings announced Tuesday that it dropped Greenland Holding Group Co. Ltd. to SD from CC following the extension of its senior notes due June 25, 2022 to June 25, 2023.

China’s property developer space slid into the distressed space last year following defaults from issuers that included China Evergrande Group, Kaisa Group Holdings Ltd. and Fantasia Holdings Group Co. Ltd.

Distressed returns up

The S&P U.S. High Yield Corporate Distressed Bond index saw gains on Tuesday.

One-day total returns improved to 0.28% in the first session back after the Juneteenth holiday from 0.16% on Friday and minus 0.51% on the same day a week ago.

Month-to-date total returns rose to minus 4.56% from minus 4.83% on Friday but up from minus 4.2% in the week-ago session.

Year-to-date index returns were minus 18.41% on Tuesday, up from minus 18.64% on Friday but down from minus 18.11% the same day a week ago.

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