Bausch Health paper extends weakness; Bed Bath & Beyond notes soften; Country Garden up

By Cristal Cody

Tupelo, Miss., Aug. 26 – Bausch Health Cos. Inc.’s notes gave back another 1¼ points to 3½ points in light trading action on Friday but were ending the week down about 8¾ points to more than 10 points.

Bed Bath & Beyond Inc.’s notes remained soft with the 5.165% senior notes due 2044 (Caa3/CCC) down 1¼ points after the paper slid into the teens a week ago.

Market tone soured by the end of the day with the S&P 500 index closing off 3.37%, the Nasdaq sinking 3.94% and the Dow Jones industrial average dropping 3.03% following Federal Reserve chairman Jerome Powell’s speech at the annual Jackson Hole symposium on Friday.

The session also was dominated by news reports surrounding the release of a redacted affidavit for the warrant to search former president Donald Trump’s Mar-a-Lago residence in Florida.

Volatility climbed more than 17%.

The CBOE Volatility index rose 17.36% to 25.56 by the close.

The iShares iBoxx High Yield Corporate Bond ETF dropped $1.27, or 1.65%, to $75.81.

Overall distressed secondary trading supply remained light on Friday. Country Garden Holdings Co. Ltd.’s 3 7/8% notes due 2030 (Ba1) picked up 2 points on $7 million of volume in one of the more active names.

The gains came a week after Country Garden warned of lower profits for the first half of 2022 ended June 30.

Bausch bonds pressured

Bausch Health’s paper continued to decline on Friday with the notes going out down as much as 13½ points on the week, a source said.

The company’s 5% senior notes due 2028 (Caa2/CCC/B-) dropped 3½ points to 41 bid by late in the day on $1 million of paper traded.

The issue gave back about 8¾ points this week.

Bausch’s 8½% notes due 2027 (Caa2/CCC/B-) were quoted down 3 points at 49½ bid. Secondary volume stayed light at $1 million.

Bausch’s 9% senior notes due 2025 (Caa2/CCC/B-) also traded Friday at 59½ bid, down 13½ points from a week ago.

The Laval, Quebec-based pharmaceutical company on Monday reported progress on its plan to separate Bausch + Lomb, including that it retained legal and financial advisers to evaluate strategic alternatives.

Bed Bath & Beyond lower

Bed Bath & Beyond’s 5.165% senior notes due 2044 (Caa3/CCC) headed into the weekend down 1¼ points at 17 bid, a source said.

Secondary supply totaled $4 million.

The bonds slid into the teens a week ago when its stock sank more than 40%.

Bed Bath & Beyond’s shares were up about 6% on Friday at $10.70.

The Union, N.J.-based home products retailer reported last week that it plans to provide an investor update at the end of the month.

Country Garden up

Country Garden’s 3 7/8% senior notes due 2030 (Ba1) picked up 2 points to a quote of 40½ bid in one of the more active names traded on Friday, a source said.

Secondary volume totaled $7 million.

Country Garden announced Aug. 18 that it expects lower profits for the first half of the six-month period ended June 30 due primarily to the Covid-19 business environment and lower property sales.

Moody’s dropped the Foshan, China-based property developer to junk in June.

The space has seen numerous defaults from issuers that include China Evergrande Group, Kaisa Group Holdings Ltd. and Fantasia Holdings Group Co. Ltd.

Distressed returns up

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns hit 0.12% on Thursday, up from minus 0.01% on Wednesday, minus 0.45% on Tuesday and minus 0.93% on Monday.

Month-to-date total returns improved to 1.8% on Thursday from 1.69% on Wednesday, 1.7% on Tuesday and 2.16% at the start of the week.

Year-to-date total returns were minus 19.24% on Thursday, compared to minus 19.33% on Wednesday, minus 19.32% on Tuesday and minus 18.96% on Monday.

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