CSC bonds decline following new loan; Credit Suisse drops ahead of report; Carnival off

By Cristal Cody

Tupelo, Miss., Dec. 16 – Altice USA, Inc. subsidiary CSC Holdings LLC’s notes declined about 2 points to 2¾ points in strong activity on Friday following the company’s pricing of a $2 billion term loan the previous day.

CSC’s 5¾% notes due 2030 (Caa1/B-) dropped 1¼ points on nearly $10 million of volume.

Market tone remained soft on Friday following 50 basis point interest rate hikes by the European Central Bank and Bank of England on Thursday and on Wednesday from the Federal Reserve.

The S&P 500 index was off 1.11% at the close.

The iShares iBoxx High Yield Corporate Bond ETF fell 42 cents, or 0.56%, to $74.58.

Volatility was moving lower over the session. The CBOE Volatility index declined 1.53% by the close to $22.48.

Credit Suisse AG’s junk paper dropped about 3 points to more than 4 points during the session ahead of the Federal Reserve’s after-market announcement that it identified deficiencies in the issuer’s resolution plan.

The Federal Reserve and the Federal Deposit Insurance Corp. on Friday reported the results of their joint review of the resolution plans for 71 domestic and foreign banking organizations, which detail a financial company’s strategy for “rapid and orderly resolutions in bankruptcy in the event of its material financial distress or failure.”

The agencies identified two deficiencies in the 2021 plan submitted by Credit Suisse that pertain to resolution planning cash flow forecasting capabilities and governance for their U.S. operations.

Credit Suisse has until May 31, 2023 to submit a revised resolution plan for its U.S. operations.

The Federal Reserve said it also identified a shortcoming in BNP Paribas’ 2021 plan submission that is related to the continuity in resolution of the bank’s securities purchase agreement activity for their U.S. operations.

Credit Suisse’s 9¾% perpetuals (B) fell 4½ points.

Also Friday, Carnival Corp.’s paper declined 1 point after softening about ½ point to more than 2 points the previous day.

The 7 5/8% senior notes due 2026 (B3/B) dropped 1 point.

Meanwhile, the global corporate default tally hit 77 as of Nov. 30, beating the year-to-date 2021 tally by five defaults, S&P Global Ratings said on Friday.

Defaults are 15% above year-to-date 2021 levels, S&P said.

CSC bonds down

CSC’s notes moved about 2 points to 2¾ points lower in the secondary market on Friday, a source said.

The company’s 5¾% notes due 2030 (Caa1/B-) dropped 1¼ points to 61 bid on $9.8 million of volume.

CSC’s 7½% notes due 2028 (Caa1/B-) fell about 2¾ points to 70¼ bid on $4 million of trading.

The 5% notes due 2031 (Caa1/B-) moved down 2¾ points to 58½ bid on $1 million of volume on Friday.

CSC’s 5 3/8% senior notes due 2028 (B1/B-) also gave back 2¼ points to trade at 83½ bid on $1.3 million of supply.

Altice said Thursday that CSC priced and allocated a new $2 billion five-year senior secured term loan B with proceeds slated to refinance CSC’s March 2017 term loans and October 2018 incremental term loans.

Moody’s Investors Service downgraded the company earlier in December based on weak operating trends in 2022 and a growing subscriber loss.

CSC is a subsidiary of New York-based communications and video services provider Cablevision Systems Corp. and Altice USA.

Credit Suisse sinks

Credit Suisse’s perpetual notes were quoted down about 3 points to more than 4 points in trading on Friday, a source reported.

The 9¾% perpetuals (B) declined 4½ points to trade at 87 bid on $1.2 million of volume.

Credit Suisse’s 4½% perpetual securities (B/B) were down around 3 points on a 58 handle over the afternoon. Volume was light at $1.6 million.

The Zurich- and New York-based issuer said in November it was accelerating the ‘radical’ restructuring of its investment bank.

Carnival dips

Carnival’s 7 5/8% senior notes due 2026 (B3/B) dropped 1 point to a quote of 80¾ bid on Friday afternoon, a source said.

The issue was active on $8.5 million of volume.

The Miami-based cruise operator’s credit default swap spreads were quoted more than 50 bps wider over the past week.

Distressed returns decline

S&P U.S. High Yield Corporate Distressed Bond index one-day returns weakened on Thursday to minus 0.65% from 0.21% on Wednesday, 1.21% on Tuesday and 0.28% at the start of the week.

Month-to-date total returns were 1¾% on Thursday, 2.41% on Wednesday, 2.2% on Tuesday and 0.98% on Monday.

Year-to-date total returns were minus 24.14% on Thursday, minus 23.65% on Wednesday, minus 23.81% on Tuesday and minus 24.72% on Monday.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.