Bausch notes lower in heavy trading; Transocean extends rally; Diamond Sports notes drop

By Cristal Cody

Tupelo, Miss., Aug. 3 – The distressed secondary market saw pharmaceutical, energy and media names active on Wednesday.

Bausch Health Cos. Inc.’s 9% notes due 2025 (Caa2/CCC), down ¼ point and yielding more than 22%, were among the most traded issues following the company’s second ratings downgrade of the week.

Transocean Inc.’s notes posted a third day of gains following the offshore driller’s stronger second-quarter report Monday.

The offshore driller’s 7¼% senior notes due 2025 (Ca/CCC) added 1¾ points.

Oil prices were lower on the day.

The West Texas Intermediate crude oil benchmark futures for September delivery settled down $3.47 to $90.95 a barrel.

Volatility declined during the session, and stocks reversed course Wednesday with indices all higher after softening in the first two sessions of the week.

The iShares iBoxx High Yield Corporate Bond ETF rose 65 cents, or 0.84%, to $78.20.

The CBOE Volatility index fell 8.27% to 21.95.

Paper from Diamond Sports Group LLC also was active Wednesday after parent company Sinclair Broadcast Group, Inc. reported second-quarter results that “deconsolidated” the local sports segment from its financial statements.

Diamond Sports’ 5 3/8% senior secured notes due 2026 (Caa1/CCC) fell 1¾ points.

Bausch trades lower

Bausch Health’s 9% senior notes due 2025 (Caa2/CCC/B-) declined ¼ point to head out Wednesday at 69½ bid following the company’s second downgrade this week, a market source said.

The issue saw strong trading activity on $14 million of volume.

The company’s paper was seen down about 1¼ points to over 2 points on Tuesday and off about 1¼ points to 3½ points on Monday.

Fitch Ratings downgraded the issuer on Wednesday.

Bausch’s ratings were lowered on Monday by S&P Global Ratings.

The Laval, Quebec-based pharmaceutical company will release second-quarter results on Aug. 9.

Transocean moves up

Transocean’s 7¼% senior notes due 2025 (Ca/CCC) added 1¾ points to trade at 81 bid on $3 million of volume by the close on Wednesday, a source said.

The Vernier, Switzerland-based offshore driller’s bonds have sweetened since the start of the week, trading about 1¾ points to more than 9 points higher on Tuesday after climbing about 2½ points to over 5 points on Monday.

Diamond Sports declines

Diamond Sports’ 5 3/8% senior secured notes due 2026 (Caa1/CCC) fell 1¾ points on steady trading totaling $4 million on Wednesday, a source said.

The bonds were quoted at 20¼ bid.

Parent Sinclair announced the change to its financial statements that removed Diamond Sports became effective in March.

Diamond Sports, a Chesapeake, Va.-based sports broadcast group, completed a distressed debt exchange in March.

Distressed returns dip

S&P U.S. High Yield Corporate Distressed Bond index total returns edged down on Tuesday.

One-day returns softened to 0.12% from 0.19% on Monday.

Month-to-date total returns were 0.31% on Tuesday, up from 0.19% in the first session of the month.

Year-to-date total returns tightened to minus 20.42% from minus 20.52% at the start of the week.

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