Credit Suisse paper mostly flat after Monday dive; Transocean up; Embarq notes steady

By Cristal Cody

Tupelo, Miss., Oct. 4 – Credit Suisse AG’s paper traded mostly flat on Tuesday after sliding about 5¾ points to more than 10 points on Monday on restructuring fears.

Credit Suisse’s 7½% perpetual notes were mostly unchanged.

Credit Suisse AG, London Branch’s 1/8% equity-linked notes due Aug. 17, 2027 quieted on Tuesday after diving in heavy trading on Monday to 88½ bid.

The notes last traded Aug. 18 with a 110 handle.

The securities were issued in a small $32.52 million offering at par on Aug. 17 and linked to the performance of an unequal weighted basket that includes the class C capital stock of Alphabet Inc., common stock of Amazon.com Inc., class A common shares of Meta Platforms, Inc., common stock of JPMorgan Case & Co. and the common stock of Walt Disney Co.

Offshore driller Transocean Inc.’s paper was heading higher in active secondary trading on Tuesday following the company’s completion of a distressed debt exchange and a downgrade from S&P Global Ratings.

Transocean’s 7½% senior notes due 2026 (Ca/CCC) rallied 2 points and were trading 3¾ points better since Friday.

Oil prices saw a second day of gains on expectations the Organization of the Petroleum Exporting Countries and partners will cut crude oil production at Wednesday’s meeting.

West Texas Intermediate crude oil benchmark futures for November deliveries, which settled Monday up $4.14, rose $2.89 on Tuesday to $86.52 a barrel.

Stocks saw strong gains on Tuesday with Elon Musk’s revived $44 billion takeout offer for Twitter in the backdrop.

The S&P 500 index climbed 3.06%, the Dow Jones industrial average jumped 2.8% and the Nasdaq closed up 3.34%.

The iShares iBoxx High Yield Corporate Bond ETF was $1.55, or 2.15%, better at $73.52.

Volatility remained on the downswing after declining nearly 5% the previous day.

The CBOE Volatility index was off 3.42% by late afternoon at 29.07.

Embarq Corp.’s 7.995% notes due 2036 (Caa2/BB/CCC) traded flat to about ¼ point softer on Tuesday and were mostly unchanged so far in October after sinking more than 24 points in the back half of September.

Fitch Ratings downgraded Embarq’s notes on Tuesday following the completion of its takeover by Connect Holding LLC and subsidiary Connect Holding II LLC.

Credit Suisse improves

Credit Suisse’s 7½% perpetual notes were mostly flat at 86¾ bid as the day wrapped, according to a market source.

The notes were quoted on Monday down more than 10 points.

The issue traded in the 95 bid range a month ago.

News reports and other restructuring chatter over the weekend and on Monday sent the Zurich-based financial services company’s AT1 capital down 5 points to 7 points on the day.

Transocean moves higher

Transocean’s 7½% senior notes due 2026 (Ca/CCC) rallied 2 points to 78 bid late afternoon with the issue trading as high as 79 bid on Tuesday, a source said.

The notes were up 3¾ points since Friday.

S&P said Monday it downgraded Transocean and parent company Transocean Ltd. to selective default from CC following the completion of the company’s debt exchange.

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

Embarq mostly flat

Embarq’s 7.995% notes due 2036 (Caa2/BB/CCC) went out Tuesday at 49¾ bid, flat to about ¼ point softer on the day, a source said.

The notes were mostly unchanged so far in October after plunging about 25 points in September.

Fitch dropped Embarq’s notes to CCC from BB on Tuesday following the completion of the acquisition of the company by Connect Holding II, doing business as Brightspeed.

On Thursday, Brightspeed withdrew an offering of senior secured notes and a first-lien term loan due to market conditions, though it expects to commence a debt financing package in the future.

The Charlotte, N.C.-based company said it would complete the acquisition of assets, including Embarq, from Lumen Technologies, Inc. with equity from Apollo Global Management, Inc. and proceeds from committed financing.

Distressed returns up

S&P U.S. High Yield Corporate Distressed Bond index one-day returns opened Monday with a 0.47% gain.

One-day returns improved from 0.26% on Friday, minus 1.25% on Thursday, minus 0.83% on Wednesday, minus 0.6% on Tuesday and minus 0.56% in the same session a week ago.

Month-to-date total returns so far for October were at 0.47% following September returns of minus 6.48%.

Year-to-date total returns were minus 25.87% on Monday versus minus 26.21% on Friday and minus 24.4% in the week-ago session.

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