Bausch Health paper declines under heavy secondary pressure; Endo lower; AMC softens

By Cristal Cody

Tupelo, Miss., Sept. 1 – A few names stood out in the distressed debt market on Thursday with Bausch Health Cos. Inc.’s paper among the most active issues traded.

Bausch’s notes were down anywhere from 1½ points to 6½ points on $77 million of secondary volume by the end of the day, a source said.

The dive follows after the pharmaceutical company’s distressed debt exchange offer and subsequent downgrades from Moody’s Investors Service, S&P Global Ratings and Fitch Ratings on Wednesday.

Bankrupt pharmaceutical manufacturer Endo International plc’s paper was lower in active trading, too, over the day.

Endo’s 7½% senior secured notes due 2027 (Caa2/CC) fell about ½ point on $14 million of paper traded.

Stocks were mixed but started to turn a corner on Thursday after declining in the front half of the week.

The iShares iBoxx High Yield Corporate Bond ETF rose 20 cents, or 0.26%, to $74.36.

Crude oil saw further declines after dropping below $90 a barrel on Wednesday.

West Texas Intermediate crude oil benchmark futures for October deliveries settled $2.94 lower at $86.61 a barrel.

AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) also were strongly traded on Thursday. The issue shed 1¾ points on $14 million of volume.

Bausch paper drops

Bausch’s notes declined across the capital structure in heavy secondary trading on Thursday, a source said.

The company’s most active issue reported, the 5½% senior secured notes due 2025 (B3/B/BB-), dropped 1¾ points to 80½ bid on $14 million of paper traded.

Bausch’s 5¼% senior notes due 2030 (Caa3/CC/C) slipped 1½ points to 35 bid on $12 million of volume.

The 8½% notes due 2027 (Caa3/CC/C) slid 6½ points to 41 bid on $12 million of paper changing hands on Thursday.

The company’s 5% senior notes due 2028 (Caa3/CC/C) gave back 2 points to a quote of 35½ bid on $9 million of secondary supply.

On Wednesday, Bausch 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.

The Laval, Quebec-based pharmaceutical company plans to spin off Bausch + Lomb.

Endo notes down

Endo subsidiary Par Pharmaceutical Inc.’s 7½% senior secured notes due 2027 (Caa2/CC) fell about ½ point to head out Thursday at 84 bid, a source said.

The notes were among the most active distressed names seen over the session on $15 million of secondary volume.

Endo announced Monday that its stock was delisted from the Nasdaq and that it plans a Sept. 29 general meeting to discuss what, if any, measures should be taken regarding that the company’s net assets are less than half of the company’s called-up share capital.

The Dublin-based pharmaceuticals company filed for Chapter 11 bankruptcy on Aug. 16 and entered into a restructuring agreement with stalking horse bidder Ad Hoc First Lien Group.

AMC secureds lower

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) shed 1¾ points on $14 million of paper traded on Thursday, a source said.

The notes were quoted at 78¾ bid.

The Leawood, Kan.-based movie theater owner and gold and silver mine investor in August gave a special dividend of one AMC preferred equity unit for each share of AMC class A common stock.

AMC’s stock closed Thursday down 5.92% at $8.58. The preferred units, traded under the symbol “APE,” fell 6.33% to end the day at $4.59.

August distressed returns

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns improved Wednesday to minus 0.39% from minus 0.71% on Tuesday and minus 0.9% on Monday.

Month-to-date total returns for August ended Wednesday at minus 0.54%, compared to minus 0.16% on Tuesday and a positive 0.55% on Monday.

Year-to-date total returns widened Wednesday to minus 21.1% from minus 20.79% on Tuesday and minus 20.23% on Monday.

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