Bed Bath & Beyond soft in thin trading on offer extension; Carvana declines; CHS quiets

By Cristal Cody

Tupelo, Miss., Nov. 21 – Bed Bath & Beyond Inc.’s notes softened in thin trading on Monday after the distressed retailer extended exchange offers for its senior bonds a second time.

The 3.749% senior notes due 2024 (C/D) dipped about ¼ point after adding about 10 points in the prior week.

S&P Global Ratings said Monday that consumer-driven sectors pushed corporate defaults up to five last week, a total that included Bed Bath & Beyond, L1R HB Finance Ltd. and Canopy Growth Corp.

The agency said it now expects the U.S. trailing 12-month speculative-grade corporate default rate to hit 3¾% by September 2023, up from 1.6% this past September.

Elsewhere in the secondary market, Carvana Co.’s 10¼% senior notes due 2030 (Caa2/CCC) traded about ¾ point lower on Monday after Moody’s Investors Service changed the issuer’s outlook to negative.

Market tone was soft as the short holiday week kicked off with stocks lower, while volatility waned.

The iShares iBoxx High Yield Corporate Bond ETF edged down 3 cents, or 0.04%, to $74.20.

The CBOE Volatility index fell 3.29% to $22.36.

Oil dropped below $80 on Monday.

West Texas Intermediate crude oil benchmark futures for December deliveries settled down 35 cents to $79.73 a barrel.

Meanwhile Monday, CHS/Community Health Systems, Inc.’s paper remained on the sidelines after gains in the prior week.

The 6 1/8% senior secured notes due 2030 (Caa2/CCC) were last seen on Friday more than 3 points higher on the week.

Bed Bath & Beyond steady

Bed Bath & Beyond’s short-dated notes mostly traded lower on Monday in thin secondary action, a source said.

The 3.749% senior notes due 2024 (C/D) softened about ¼ point to 32 7/8 bid.

The bonds went out Friday about 10 points higher on the week.

Bed Bath & Beyond’s 4.195% senior notes due 2034 were not active in the secondary market over the session. The issue was last seen on Friday trading in the 15 bid area, up more than 5 points on the week.

Meanwhile, the 5.165% senior notes due 2044 were down about 3 points at the 15¾ bid range in little trading on Monday.

The long bonds went into the weekend up more than 7 points on the week.

The company is offering to exchange its outstanding notes for new second- and third-lien debt.

Bed Bath & Beyond said Monday that it was extending the exchange offers, first set to expire on Nov. 15, to Dec. 5.

The offers previously had been extended to Friday.

The Union, N.J.-based home products retailer said as of Friday that 16.45% of the 3.749% notes, 24.46% of the 4.915% notes and 11.1% of the 5.165% notes have been validly tendered.

Carvana declines

Carvana’s 10¼% senior notes due 2030 (Caa2/CCC) dropped about ¾ point to around the 45½ bid area in mostly light trading totaling more than $1 million on Monday, a source said.

The issue finished the prior week down nearly 1¼ points.

Carvana brought the notes to the primary market on April 27 in a $3.28 billion offering at par.

Moody’s said Monday it affirmed the senior ratings but changed the Phoenix-based online car retailer’s outlook to negative from stable.

CHS bonds quiet

In the health care space, CHS/Community Health’s 6 1/8% senior secured notes due 2030 (Caa2/CCC) were not actively traded on Monday after the paper rallied in the prior week, a source said.

The bonds were last seen Friday trading in the 48½ bid range, more than 3 points better on the week.

The Franklin, Tenn.-based operator of acute care and outpatient facilities’ issue has gained about 7 points since October.

Distressed index positive

S&P U.S. High Yield Corporate Distressed Bond index one-day returns improved in Friday’s session to 0.11% versus minus 0.63% on Thursday, 0.07% on Wednesday, 0.82% on Tuesday and 1.2% on Monday.

Month-to-date total returns were minus 0.31% on Friday, minus 0.42% on Thursday, 0.21% on Wednesday, 0.14% on Tuesday and minus 0.67% at the start of the prior week.

Year-to-date total returns were minus 25.9% on Friday, minus 25.98% on Thursday, minus 25.51% on Wednesday, minus 25.56% on Tuesday and minus 26.17% in the Nov. 14 session.

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