Bed Bath & Beyond paper gains on short end; Transocean edges up; Michaels notes lower

By Cristal Cody

Tupelo, Miss., July 18 – Distressed retailer Bed Bath & Beyond Inc.’s notes went out mixed on Monday with the short-dated tranche of 3.749% senior notes due 2024 (B3/B+) up 1¼ points and the long end mostly flat.

Market volatility ramped up during the session as stocks turned negative. The CBOE Volatility index rose 4¾% to $25.38.

Stock indices were down less than 1% with the S&P 500 index off 0.84% and the Nasdaq down 0.81% at the close.

The iShares iBoxx High Yield Corporate Bond ETF fell 75 cents, or 0.99%, to $74.75.

Oil prices saw gains.

West Texas Intermediate crude oil benchmark futures for August deliveries settled Monday $5.01 higher at $102.60 a barrel.

September Brent crude oil deliveries rose $5.11 to settle at $106.27 a barrel.

Transocean Inc.’s 8% debentures due 2027 (C/CCC-) recovered ¼ point over the day after dropping nearly 10 points in the prior week.

In other distressed retail paper, Michaels Cos., Inc. 7 7/8% senior notes due 2029 (Caa1/CCC+) slipped more than ¼ point after closing out the prior week down about 2 points.

Bed Bath active

Bed Bath & Beyond’s 3.749% senior notes due 2024 (B3/B+) climbed 1¼ points to 41 bid in strong trading activity on Monday, a market source said.

The bonds ended the prior week about ½ point higher.

Bed Bath & Beyond’s 5.165% senior notes due 2044 (B3/B+) were little changed over the day at the 19½, 19¾ bid range.

The Union, N.J.-based home products retailer’s notes fell about 3 points last week.

Transocean higher

Transocean’s bonds were strengthening over the day on the backdrop of higher oil prices, according to a market source.

The 8% debentures due 2027 (C/CCC-) rose ¼ point to 56¾ bid.

The Vernier, Switzerland-based offshore driller’s notes ended the previous week down more than 9 points.

Michaels trades lower

Michaels’ 7 7/8% senior notes due 2029 (Caa1/CCC+) slipped more than ¼ point to 67 3/8 bid during the session, a source said.

The notes finished the prior week down about 2 points.

Earlier in July, Michaels was downgraded by Moody’s Investors Service and given a negative outlook from S&P Global Ratings.

The Irving, Tex.-based arts and crafts retailer was taken private by funds managed by Apollo Global Management, Inc. affiliates in 2021.

Distressed index up

The S&P U.S. High Yield Corporate Distressed Bond index turned positive on Friday.

One-day total returns improved to 0.82% versus minus 1.12% on Thursday, minus 0.44% on Wednesday, minus 0.45% on Tuesday and minus 0.08% at the start of the prior week.

Month-to-date total returns were minus 1.78% on Friday, compared to minus 2.59% on Thursday, minus 1.49% on Wednesday, minus 1.05% on Tuesday and minus 0.6% at the week’s start.

Year-to-date total returns ended the week at minus 24.01% and came to minus 24.63% on Thursday, minus 23.77% on Wednesday, minus 23.44% on Tuesday and minus 23.09% in the July 11 session.

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