Bausch notes mixed on exchange offer; Transocean dips; Bed Bath & Beyond improves

By Cristal Cody

Tupelo, Miss., Aug. 31 – Bausch Health Cos. Inc.’s paper was mixed but mostly declined on Wednesday on news of the company’s debt exchange offer and subsequent downgrades from all three major credit ratings agencies.

Bausch’s 9% senior notes due 2025 (Caa3/CC/C) were among the most active junk distressed issues seen trading and were up nearly 7½ points.

Most of the rest of the company’s capital structure softened during the session, a market source said.

Bausch’s 7¼% senior notes due 2029 (Caa3/CC/C) dropped 5½ points, while the 5¼% notes due 2031 fell ¾ point.

Moody’s Investors Service, S&P Global Ratings and Fitch Ratings downgraded the company on Wednesday on the “distressed” debt exchange announcement.

Broader market weakness leaked into Wednesday’s session with trading continuing to quiet ahead of the long holiday weekend.

Stocks closed soft again with the S&P 500 index down 0.78%.

The iShares iBoxx High Yield Corporate Bond ETF fell 41cents, or 0.55%, to $74.53.

Measured market volatility was lower with the CBOE Volatility index off 2.82% at 25.47.

Oil prices saw further losses on Wednesday and dropped below $90 a barrel. West Texas Intermediate crude oil benchmark futures for October deliveries, which settled Tuesday down $5.37, declined $2.09 on Wednesday to $89.55 a barrel.

Transocean Inc.’s 8% debentures due 2027 (Ca/CCC-) slipped ½ point and were trading nearly 2 points lower since Friday.

Bed Bath & Beyond Inc.’s notes improved as the company announced strategic changes, including an offering of up to 12 million shares of common stock, while its stock sank more than 21%.

Bed Bath & Beyond’s 5.165% senior notes due 2044 (Caa3/CCC) moved out of the teens after trading 2¾ points higher on the day.

The retailer’s stock closed down 21.3% at $9.53.

Bausch notes mixed

Bausch’s paper had steadily declined in the prior week and in this week’s first two sessions ahead of the exchange offer announcement before seeing a mixed reaction, a source said Wednesday.

Bausch’s 9% senior notes due 2025 (Caa3/CC/C) were up nearly 7½ points at 65 bid.

Bausch’s 7¼% senior notes due 2029 (Caa3/CC/C) dropped 5½ points to 37¼ bid, while the 5¼% notes due 2031 fell ¾ point to 38¾ bid.

The company’s 5% senior notes due 2028 (Caa3/CC/C) dropped 2½ points to head out at 37½ bid, more than 7 points down from Friday.

Bausch plans to spin off Bausch + Lomb and has retained legal and financial advisers to evaluate strategic alternatives.

On Wednesday, the Laval, Quebec-based pharmaceutical company announced a debt restructuring that would replace existing senior debt with new first-lien and second-lien secured bonds.

Moody’s, S&P and Fitch said they consider the restructuring a distressed debt exchange.

Transocean notes dip

Transocean’s 8% debentures due 2027 (Ca/CCC-) slipped ½ point in mostly light trading during the session, a source said.

The Vernier, Switzerland-based offshore driller’s notes were quoted at 74½ bid, nearly 2 points lower this week.

Bed Bath & Beyond up

Bed Bath & Beyond’s 5.165% senior notes due 2044 (Caa3/CCC) saw a bump of 2¾ points by the day’s end, going out at 20¾ bid, a market source said.

The bonds slid into the teens earlier in August.

The Union, N.J.-based home products retailer on Wednesday announced strategic changes, including that it secured more than $500 million of new financing and plans a potential offering of up to 12 million shares of common stock.

Bed Bath & Beyond also reported it has identified 150 lower-producing stores for closure, intends to exit three of its nine labels and that it is in the early phase of the search process for a new chief executive officer.

The retailer announced the ouster of its previous CEO and other senior leadership changes in June.

Bed Bath & Beyond plans to release second-quarter results on Sept. 29.

Distressed August returns

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns remained soft on Tuesday at minus 0.71% but improved from minus 0.9% on Monday.

Month-to-date total returns hit negative numbers on Tuesday at minus 0.16%, down from 0.55% on Monday.

Year-to-date total returns dropped to minus 20.79% on Tuesday from minus 20.23% on Monday.

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