Endo notes decline as Nasdaq sets stock delisting date; Bausch mixed; CHS weakens

By Cristal Cody

Tupelo, Miss., Sept. 14 – The distressed space saw a few names active in otherwise mostly light secondary action on Wednesday.

Endo International plc’s notes declined following the bankrupt pharmaceutical company’s notification that its stock will be removed from listing on the Nasdaq Stock Market later in September.

Endo’s 9½% senior secured notes due 2027 fell 1½ points.

Bausch Health Cos. Inc.’s notes were mixed after the company announced the early results of a debt exchange offer.

Bausch’s 9¼% senior notes due 2026 (Caa3/CC/C) dropped 1 5/8 points on $9 million of secondary action, while the 5½% secured notes due 2025 (B3/B/BB-) traded more than ¾ point better on $5 million of volume.

Community Health Systems Inc.’s senior secured notes softened about ¼ point to ½ point in light trading over the day.

Stocks edged higher after Tuesday’s losses that came after the Labor Department reported higher-than-expected U.S. inflation data for August. The S&P 500 index was up 0.34% on Wednesday following a 4.32% decline on Tuesday.

The iShares iBoxx High Yield Corporate Bond ETF rose 11 cents to $74.42.

Measured volatility was lower as the market adjusts to the idea of additional rate hikes.

The CBOE Volatility index fell 3.96% to 26.19.

The August inflation data likely guarantees “at least a 75-bps hike in the benchmark Fed Funds interest rate at the Fed’s policy meeting next week,” according to a Confluence Investment Management note on Wednesday.

Oil futures gained over the day.

West Texas Intermediate crude oil benchmark futures for October deliveries settled up $1.17 at $88.48 a barrel.

Transocean Ltd.’s notes rose about ¾ point to more than 3 points on Wednesday following the offshore driller’s report the previous day of a bond exchange offer that provides it with $175 million of liquidity.

Transocean’s 8% debentures due 2027 (C/CCC-) picked up 2¼ points on $7 million of volume.

Endo weakens

Endo Finance LLC’s 9½% senior secured notes due 2027 dropped 1½ points by the afternoon to 18 bid from where the issue last traded on Monday, according to a market source.

The notes were down 5½ points this week following a 4-point drop on Monday.

The secured issue has declined more than 8 points since August.

Endo Luxembourg Finance Co. Sarl’s 6 1/8% senior secured first-lien notes due 2029 also were 1½ points lower this week in light trading at 85 bid on Wednesday.

Meanwhile, Endo subsidiary Par Pharmaceutical Inc.’s 7½% senior secured notes due 2027 improved 5/8 point to 85 bid in thin secondary action.

Endo announced on Wednesday in a regulatory filing that the Nasdaq will remove the company’s stock from listing on Sept. 26.

As previously reported, the bankrupt pharmaceutical company was notified in August that its stock no longer met the exchange’s listing rules.

Endo filed for Chapter 11 bankruptcy in August in the U.S. Bankruptcy Court for the Southern District of New York after missing interest payments on several outstanding bonds.

The Dublin-based pharmaceuticals company entered into a restructuring agreement with stalking horse bidder Ad Hoc First Lien Group, which is made up of certain creditors holding more than 50% of its outstanding secured debt.

Bausch paper mixed

Bausch’s paper went out mixed in mostly light secondary activity on Wednesday, a source said.

In one of the more active issues seen over the session, Bausch’s 9¼% senior notes due 2026 (Caa3/CC/C) dropped 1 5/8 points to 55 bid on $9 million of volume.

The 5½% secured notes due 2025 (B3/B/BB-) also were active and trading more than ¾ point better at 79¾ bid on $5 million of volume.

Bausch’s 6¼% senior notes due 2029 (Caa3/CC/C) were up nearly 3½ points at 36 bid in light supply over the day.

On Wednesday, Bausch announced the early results of its offer to exchange existing senior notes, including the 5% notes and 6¼% issue, for up to $4 billion of new secured notes.

As of Tuesday, $5.58 billion of notes had been validly tendered.

Bausch launched the debt restructuring on Aug. 30.

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

CHS notes lower

CHS/Community Health Systems, Inc.’s 6 7/8% senior secured notes due 2029 (Caa2/CCC) gave back ¼ point to trade at 63½ bid on Wednesday, a source said.

The bonds were moving 1 point lower on the week.

The Franklin, Tenn.-based operator of acute care and outpatient facilities’ 6 1/8% senior secured notes due 2030 (Caa2/CCC) also fell ½ point to 63¼ bid in thin secondary activity on Wednesday and were little changed on the week.

Transocean bonds up

Transocean Inc.’s 7½% senior notes due 2026 (Ca/CCC) rallied 3¼ points to wrap Wednesday at 83¼ bid on $5 million of secondary action, a source said.

Transocean’s 8% debentures due 2027 (C/CCC-) traded 2¼ points better at 79¼ bid on $7 million of volume.

Transocean’s 6.8% senior notes due 2038 (C/CCC-) also went out ¾ point higher at 57 bid on $2 million of paper traded on Wednesday.

The Steinhausen, Switzerland-based offshore driller announced Tuesday that it executed a privately negotiated bond exchange and purchase agreements that provides it with $175 million of liquidity.

The transactions are expected to close on Sept. 30.

Distressed returns drop

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns slid on Tuesday in line with stocks after August inflation data came in higher than expected with one-day returns at minus 1.24% after ending Monday at 0.3%.

Month-to-date total returns fell to minus 0.88% from 0.37% on Monday.

Year-to-date total returns declined to minus 21.79% on Tuesday from minus 20.81% at the week’s start.

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