Pre-holiday action thins; PROG bonds down; Bed Bath & Beyond lower; Exela declines

By Cristal Cody

Tupelo, Miss., July 1 – Secondary action thinned in the early session on Friday with emerging markets paper dominating distressed trading as desks cleared ahead of the Fourth of July holiday.

Petroleos Mexicanos SAB de CV (Pemex) was the most active name, a source said.

Market tone was up as stocks turned positive by the day’s end and measured market volatility receded.

The iShares iBoxx High Yield Corporate Bond ETF improved 0.95% to $73.98.

The Chicago Board Options Exchange’s CBOE Volatility index ended down 7% to 26.70.

Bonds from fintech holding company PROG Holdings, Inc. were active and 1/8 point lower on the day on $7 million of secondary action.

Bed Bath & Beyond Inc.’s senior notes softened further ahead of the long weekend.

The 5.165% senior notes due 2044 (B3/B+) were down 1 3/8 points on Friday and more than 15 points lower on the week.

Exela Technologies, Inc.’s 11½% first priority senior secured notes due 2026 (Caa3/CCC-) also were under pressure with the paper 3¼ points lower by the afternoon.

Endo International plc remained in focus on Friday with the company announcing that it received a notice from the Nasdaq Stock Market that it was not in compliance with minimum bid requirements, but bond trading was thin, a source said.

Endo said the notice it received on Friday indicated the company was out of compliance “because the closing bid price for the company’s common stock has fallen below $1.00 per share for the last 30 consecutive business days.”

The company has until Dec. 28 to become compliant.

Endo’s stock finished up 22.42% at 57 cents on Friday.

The announcement came after Endo reported Thursday that it missed a $38 million interest payment on its 6% senior notes due 2028. The Dublin-based pharmaceuticals maker has a 30-day grace period before a default is declared.

Endo Finance LLC’s 6% senior notes due 2028 (Caa3/C) traded mostly unchanged in thin activity at 8 bid on Friday, a source said.

PROG down

PROG’s 6% senior notes due 2029 (B1/BB-) fell 1/8 point to 75¾ bid in the short session, a source said.

The notes were seen among the day’s more active names on $7 million of volume.

The Salt Lake City-based fintech holding company sold the notes at par in November 2021.

Bed Bath lower

Bed Bath & Beyond’s 5.165% senior notes due 2044 (B3/B+) fell 1 3/8 points on $4 million of paper traded on Friday, a source said.

The bonds were quoted at 20¼ bid.

The issue fell 3¼ points on Thursday after dropping about 10 points on Wednesday.

The Union, N.J.-based home products retailer on Wednesday reported a heavy fiscal first-quarter net loss and a shake-up of its senior management.

Exela declines

In other distressed issues, Exela Technologies’ 11½% first priority senior secured notes due 2026 (Caa3/CCC-) dropped 3¼ points to 30 bid on Friday, a source said.

Activity was light on $1 million of trading volume.

In June, Exela reported it closed on a $150 million three-year financing facility that replaced its existing securitization facility.

The Irving, Tex.-based software and services company’s stock was up 0.35% at 11 cents a share on Friday. The 52-week high is $5.45.

Distressed returns weak

S&P U.S. High Yield Corporate Distressed Bond index returns remained soft over the first four sessions of the short week.

One-day total returns dropped on Thursday to minus 1.96% from minus 1.3% on Wednesday, minus 0.58% on Tuesday and minus 0.11% on Monday.

June total returns ended at minus 9.49% for the month, wider than month-to-date total returns of minus 7.68% on Wednesday, minus 6.47% on Tuesday and minus 5.92% at the start of the week.

Year-to-date total returns widened to minus 22.63% on Thursday, compared to minus 21.08% on Wednesday, minus 20.04% on Tuesday and minus 19.57% on Monday.

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