Carvana, Rite Aid, AMC down; Air Methods quiet; Plains up; Oracle as low as mid-60s

By Cristal Cody

Tupelo, Miss., Nov. 7 – Carvana Co.’s paper declined about 1 point to 3 points on Monday following Friday’s slide of about 5¼ points to 7 points on the heels of a weak third-quarter report.

The online car retailer’s 10¼% senior notes due 2030 (Caa2/CCC) fell 1¾ points by the day’s end.

Rite Aid Corp.’s paper gave back some of Friday’s gains made following a cash tender offer announcement last week and downgrade from S&P Global Ratings on Monday.

Rite Aid’s 7½% senior secured notes due 2025 (B3/CCC-/BB-) fell 1¼ points after going into the weekend up 3½ points.

AMC Entertainment Holdings, Inc.’s 7½% notes due 2029 (Caa1/B-) were under pressure on Monday with the paper down 2½ points.

In other action, Air Methods Corp.’s 8% senior notes due 2025 (Ca/CCC) have seen little trading over the past month and were quiet on Monday following a downgrade from Moody’s Investors Service.

Market tone was mostly stable with stock indices higher and volatility lower as focus shifts toward October inflation data due out Thursday.

The iShares iBoxx High Yield Corporate Bond ETF edged down 1 cent, or 0.01%, to $72.89.

The West Texas Intermediate crude oil benchmark futures for December delivery settled down 82 cents to $91.79 a barrel.

Plains All American Pipeline, LP’s 6 1/8% series B fixed-to-floating rate cumulative redeemable perpetual preferred units (Ba2/BB/BB) jumped 1½ points on the day in strong trading.

Also Monday, Oracle Corp. hit the primary market with a long-expected bond offering (Baa2/BBB/BBB+) to fund its $28.3 billion acquisition of Cerner Corp.

Oracle offered four tranches of new notes due in 2025, 2029, 2032 and 2052 on talk in the Treasuries plus 155 basis points area on the short end to Treasuries plus 310 bps area on the 30-year tranche.

The company’s existing Baa2/BBB-rated paper was trading with handles as low as the mid-60s on its longer-dated tranches, according to a market source.

Oracle’s existing 4.3% senior notes due 2034 rose about 1½ points to the 83 bid area on Monday in light supply.

Carvana paper drops

Carvana’s notes remained weak on Monday on more than $63 million of paper traded after shedding about 5¼ points to 7 points on Friday on about $89 million of secondary supply, a source said.

Carvana's 10¼% senior notes due 2030 (Caa2/CCC) fell 1¾ points to a quote of 45¼ bid on $12.5 million of paper changing hands.

The bonds slid more than 6½ points on Friday on $41.5 million of volume.

On Thursday, Carvana reported third-quarter gross profit sank 31%.

The Phoenix-based online car retailer’s stock fell more than 15% on Monday to $7.39 after declining nearly 40% on Friday.

Rite Aid gives back

Rite Aid’s 7½% senior secured notes due 2025 (B3/CC/BB-) gave back 1¼ points to head out Monday at 70¾ bid on active trading totaling about $5 million, a source said.

The issue had rallied 3½ points on Friday on about $20 million of volume following Rite Aid’s announcement of a cash tender offer to purchase up to $200 million of the notes.

The notes were previously included in a tender offer Rite Aid conducted in June to purchase up to $150 million of its 7½% senior secured notes due 2025, 7.7% senior debentures due 2027 and 6 7/8% debentures due 2028.

The new tender offer expires Dec. 2 with an early deadline set for Nov. 17.

Rite Aid’s 8% senior secured notes due 2026 (B3/CC/BB-), left out of the summer tender, also declined Monday, trading off ¾ point at 60¼ bid.

The bonds went out Friday down about 1¾ points.

S&P said Monday that it downgraded the issuer and the senior secured notes in the tender offer, as well as the 8% notes based on the distressed tender offer.

The Camp Hill, Pa.-based drug retailer’s credit default swap spreads widened more than 350 bps in the prior week.

AMC bonds lower

AMC’s 7½% notes due 2029 (Caa1/B-) were under pressure on Monday with the paper down 2½ points at 63½ bid by the day’s end, a source said.

Secondary supply was busy with $12 million of the notes traded.

The Leawood, Kan.-based movie theater owner and gold and silver mine investor sold $950 million of the first-lien notes in February 2022 at par.

Air Methods soft

In the health care services space, Air Methods’ 8% senior notes due 2025 (Ca/CCC) were not active in the secondary market on Monday, a source said.

The bonds were last seen in mid-October trading around the 50 bid range.

The notes from the ASP AMC Holdings Inc. unit started the year trading around 85½ bid.

Moody’s announced Friday that it downgraded the New York-based ambulance service provider and the notes.

Plains issue up

Plains All American Pipeline was among the more active names seen trading on Monday, a source said.

The company’s 6 1/8% series B fixed-to-floating rate cumulative redeemable perpetual preferred units (Ba2/BB/BB) climbed 1½ points over the session to head out at 86¼ bid.

Trading volume in the Houston-based natural gas and crude oil transporter’s issue totaled more than $12 million.

Distressed index soft

S&P U.S. High Yield Corporate Distressed Bond index one-day returns improved on Friday but remained soft at minus 0.84%, compared to minus 1.19% on Thursday, minus 0.18% on Wednesday, minus 0.15% on Tuesday and 0.15% at the start of the prior week.

Month-to-date total returns for November weakened to minus 2.34% on Friday versus minus 1.51% on Thursday, minus 0.33% on Wednesday and minus 0.15% on Tuesday.

Year-to-date total returns fell to minus 27.41% on Friday from minus 26.8% on Thursday, minus 25.91% on Wednesday, minus 25.78% on Tuesday and minus 25.67% at the week’s start.

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