Qurate down in November, CDS spreads widen; Rite Aid mixed; Carnival CDS spread firms

By Cristal Cody

Tupelo, Miss., Nov. 17 – Qurate Retail Inc. was among distressed names with credit default swap spreads wider on the week.

CDS spreads from the company, formerly known as Liberty Interactive Corp., widened more than 70 basis points for the past week ended Wednesday.

The home shopping network owner’s 8½% senior debentures due 2029 (B2/B-) have climbed 3½ points since Monday but remain down more than 10 points since the end of October.

Rite Aid Corp.’s 7½% senior secured notes due 2025 (B3/CCC-/CCC) gave back ¾ point in thin trading on Thursday after rising most of the week.

The retailer’s CDS spreads tightened more than 200 bps this week for the period ending Wednesday.

Market tone was soft on the day with volatility little changed as economic data reports were digested.

The iShares iBoxx High Yield Corporate Bond ETF fell 32 cents, or 0.43%, to $74.07.

The CBOE Volatility index edged down 0.71% to $23.94.

Oil prices dropped.

West Texas Intermediate crude oil benchmark futures for December deliveries declined $3.95 to settle at $81.64 a barrel.

Meanwhile, CDS spreads from both Carnival Corp. and Royal Caribbean Group came in over the week, while the cruise line operators’ junk paper softened on Thursday.

Carnival’s CDS spreads firmed nearly 400 bps this past week.

Carnival’s notes traded down about ¼ point to more than 1 point on Thursday.

Royal Caribbean Cruises Ltd.’s CDS spreads were 100 bps tighter over the week.

Royal Caribbean’s 9¼% notes due 2029 (B3/B+) were seen down ½ point on Thursday.

Qurate paper active

Qurate Retail’s 8½% senior debentures due 2029 (B2/B-) issued by Liberty Media Corp. were fairly active in the secondary market on Thursday with the notes trading around 50¾ bid, a source said.

The bonds have climbed 3½ points since Monday but remain down more than 10 points since the end of October.

The West Chester, Pa.-based home shopping network owner’s CDS spreads also eased 71 bps over the past week ended Wednesday to 1,758 bps, Moody’s Investors Service said.

Rite Aid notes mixed

Rite Aid’s 7½% senior secured notes due 2025 (B3/CC/CCC) declined ¾ point to 73 bid in light trading action on Thursday but remained up about 1 point on the week, a source said.

Rite Aid’s CDS spreads tightened 213 bps for the past week ended Wednesday to 3,546 bps, according to a Moody’s report on Thursday.

The CDS spreads had widened 104 bps in the prior week.

Rite Aid’s early tender deadline for a cash tender offer on the secured notes was Thursday.

The distressed tender offer prompted the Camp Hill, Pa.-based drug retailer’s downgrades in the prior week by S&P Global Ratings and Fitch Ratings.

Carnival, Royal soften

Carnival’s notes traded down about ¼ point to more than 1 point over the session in active secondary supply, a source said.

Carnival’s 6% notes due 2029 (B3/B) dropped more than 1 point to around 70 bid on $15.85 million of volume.

The cruise operator’s CDS spreads firmed 391 bps in the past week ended Wednesday to 1,443 bps, according to a Moody’s report on Thursday.

Royal Caribbean Cruises’ CDS spreads also were 100 bps tighter at 723 bps for the week ended Nov. 16, Moody’s said.

Royal Caribbean’s 9¼% notes due 2029 (B3/B+) were seen down ½ point on Thursday at 102½ bid on nearly $15 million of paper traded, a source said.

Distressed returns drop

S&P U.S. High Yield Corporate Distressed Bond index one-day returns fell midweek to 0.07%, compared to 0.82% on Tuesday and 1.2% on Monday.

Month-to-date total returns for November were higher on Wednesday at 0.21%, up from 0.14% on Tuesday and minus 0.67% at the start of the week.

Year-to-date total returns edged up to minus 25.51% from minus 25.56% on Tuesday and minus 26.17% on Monday.

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