Embarq rebounds; Diebold Nixdorf moves higher; CHS notes decline ahead of earnings

By Cristal Cody

Tupelo, Miss., Oct. 25 – A few distressed names mostly improved on Tuesday as market tone remained strong and volatility waned.

Embarq Corp.’s 7.995% notes due 2036 (Caa2/CCC/CCC) jumped 2¾ points in heavy trading totaling $12 million as one of most active distressed names seen during the session.

Tone remained upbeat over the session, led by higher stocks and lower volatility. The Nasdaq climbed 2.25%.

The iShares iBoxx High Yield Corporate Bond ETF rose 63 cents, or 0.87%, to $73.17.

The CBOE Volatility index declined 4.66% by the close to 28.46.

Diebold Nixdorf Inc.’s 8½% senior notes due 2024 (Ca/C) traded 1½ points better on the day with the company’s paper stronger since the ATM manufacturer announced that it entered into an agreement with stakeholders to refinance debt and provide the company with $400 million in additional financing.

The company and notes were downgraded on Tuesday by S&P Global Ratings.

Elsewhere, Community Health Systems Inc.’s notes remained soft with the 6 1/8% senior secured notes due 2030 (Caa2/CCC/CCC) about ½ point lower on the day and down nearly 2 points since Friday ahead of the issuer’s earnings report due Wednesday.

Embarq bonds up

Embarq’s 7.995% notes due 2036 (Caa2/CCC/CCC) added 2¾ points to hit 37 bid late Tuesday in heavy secondary action that saw the issue among the most active distressed names traded, a source said.

Volume totaled $12 million.

The supply followed strong trading on Monday when the notes improved ½ point on the day.

Connect Holding II LLC, doing business as Brightspeed, recently closed on its acquisition of the Overland Park, Kan.-based telecommunications company from Lumen Technologies, Inc.

Diebold Nixdorf gains

Diebold Nixdorf’s 8½% senior notes due 2024 (Ca/C) traded 1½ points better by late Tuesday afternoon with the bonds quoted at 51½ bid, more than 4 points better since Wednesday, a source said.

S&P downgraded the senior notes on Tuesday to C from CCC- with the agency citing the company’s transaction agreement to extend debt maturities.

Diebold Nixdorf announced on Thursday that it planned to refinance debt with near-term maturities.

The Hudson, Ohio-based financial and retail technology company expects the new agreement with the majority of holders of its term loans and secured notes due 2025 and unsecured notes due 2024 to be completed before Dec. 31.

CHS notes soft

CHS/Community Health Systems, Inc.’s 5 5/8% senior secured notes due 2027 (B2/B/BB-) moved down about 1 point to head out near the 70¼ bid area on about $6 million of trading, a source said.

Also, CHS’ 6 1/8% senior secured notes due 2030 (Caa2/CCC/CCC) slipped about ½ point to 35½ bid in mostly light trading.

The notes were down nearly 2 points from Friday.

The Franklin, Tenn.-based operator of acute care and outpatient facilities will report third-quarter earnings results after the market closes on Wednesday.

Distressed index up

S&P U.S. High Yield Corporate Distressed Bond index one-day returns kicked off the week higher at 0.01% on Monday after finishing Friday at minus 0.57%, but remain down from the 0.58% level seen the same day a week ago.

Month-to-date total returns improved slightly to minus 1.38% on Monday, compared to minus 1.39% on Friday. Monthly returns totaled minus 0.07% a week ago.

Year-to-date total returns edged tighter to minus 27.23% on Monday versus minus 27.24% on Friday but remained wide of returns of minus 26.26% in the same session a week earlier.

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