Community Health notes mixed ahead of earnings report; Bed Bath, Party City down

By Cristal Cody

Tupelo, Miss., July 25 – Community Health Systems Inc.’s senior secured notes were mixed in thin trading on Monday after going out Friday about 2 points to more than 5 points higher.

The care and outpatient facilities operator is scheduled to post quarterly earnings midweek.

The junk space was a touch weaker on Monday ahead of a widely expected rate hike from the Federal Reserve on Wednesday.

The iShares iBoxx High Yield Corporate Bond ETF edged down 2 cents, or 0.03%, to $76.87.

Market volatility was higher with the CBOE Volatility index up 1.43% at 23.36.

The U.S. distress ratio is soaring with the ratio more than double at 9.2% as of July 5 from 4.3% as of June 3, according to a S&P Global Ratings report released Monday.

The distress ratio is now at its highest level since October 2020 and has outpaced the five-year average of 7.3%.

The retail sector leads the distress ratio at 17.7%, S&P said.

Several retailers have been under pressure over the summer, including Bed Bath & Beyond Inc., Michaels Cos., Inc. and Rite Aid Corp.

Bed Bath & Beyond’s notes traded about ¼ point to 1 point lower as the week kicked off.

Party City Holdings Inc.’s 8¾% senior secured notes due 2026 (B3/B-) that priced last year traded more than 2 points weaker and were yielding nearly 25% on Monday.

CHS notes mixed

CHS/Community Health Systems, Inc.’s 6 7/8% senior secured notes due 2029 (Caa2/CCC) fell 1¾ points to 63¾ bid in light trading over the session, a source said.

The notes climbed 5 1/8 points on Friday and were more than 6½ points higher on the week.

Meanwhile, Community Health’s 6 1/8% senior secured notes due 2030 (Caa2/CCC) rose more than 2½ points to 63½ bid in thin activity on Monday.

The notes went out Friday about 2 points higher and more than 4 points better on the week.

The Franklin, Tenn.-based operator of acute care and outpatient facilities is scheduled to post second-quarter earnings results after the market closes on Wednesday.

Bed Bath & Beyond lower

Bed Bath & Beyond’s notes softened in mostly light trading on Monday, a source said.

The retailer’s 3.749% senior notes due 2024 (Caa3/B-) declined 1 point to 46 bid.

Bed Bath & Beyond’s 5.165% senior notes due 2044 (Caa3/B-) fell about ¼ point to the 19¼ bid area during the session.

Moody’s Investors Service downgraded the issuer and the senior bonds last week.

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

Party City declines

Party City Holdings’ 8¾% senior secured notes due 2026 (B3/B-) dropped 2 1/8 points to 64 3/8 bid and a yield of 24.28% on Monday, a source said.

Secondary action was steady on $6 million of volume reported.

The Rockaway, N.J.-based retailer sold $750 million of the notes in February 2021 at par.

Distressed returns up

The S&P U.S. High Yield Corporate Distressed Bond index finished Friday higher.

One-day total returns were 0.74%, compared to 0.67% on Thursday, 1.18% on Wednesday, 0.34% on Tuesday and 0.67% at the week’s start.

Month-to-date total returns rose to 1.8% versus 1.05% on Thursday, 0.38% on Wednesday, minus 0.79% on Tuesday and minus 1.13% at the start of the week.

Year-to-date total returns improved on Friday to minus 21.23% from minus 21.81% on Thursday, minus 22.33% on Wednesday, minus 23.24% on Tuesday and minus 23.5% in the July 18 session.

© 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.