Distressed debt opens year higher; CSC Holdings better; Michaels returns to 68-handle

By Abigail W. Adams

Portland, Me., Jan. 3 – While equity indexes opened the New Year with losses, it was a strong start for the distressed debt space with several names lifted with buyers in the market.

The S&P U.S. High Yield Corporate Distressed Bond index closed Tuesday with a 0.12% gain after closing out 2022 with a 25% loss.

Altice USA Inc. subsidiary CSC Holdings LLC’s junk bonds improved in active trading after closing 2022 at historic lows.

Michaels Cos., Inc.’s 7 7/8% senior notes due 2029 (Caa1/CCC) were also on the rise in active trading with the notes returning to a 68-handle after slipping below at the close of 2022.

CSC Holdings improves

CSC Holdings’ junk bonds were in focus in the distressed debt space with the notes improved after closing the previous year near historic lows.

The 7½% senior notes due 2028 (Caa1/B-) gained 1 point in active trading.

The notes closed Tuesday at 69 1/8 with the yield 16½%, according to a market source.

There was $9.5 million in reported volume.

The 5¾% senior notes due 2030 gained about ½ point to close the day at 58 with the yield 15 7/8%.

The 4 5/8% senior notes due 2030 gained 3/8 point to close the day at 55 7/8. The yield was 14%.

There was about $8 million in reported volume.

While the notes improved on Tuesday, they remain near their historic lows.

CSC Holdings saw heavy selling in December after parent company Altice announced it would not pursue the sale of its Suddenlink business.

The sale could have netted the company $20 billion, which could have been used to pay down debt, sources previously said.

Michaels gains

Michaels’ 7 7/8% senior notes due 2029 were on the rise in active trading with the notes returning to a 68-handle after dipping below at the close of 2022.

The notes were up about ½ point to trade in the 68 to 68¼ context, a source said.

The yield was about 16%.

There was $7 million in reported volume.

The arts and crafts retailer’s 7 7/8% notes surged more than 10 points to a 68-handle in mid-December on earnings-related news.

Prior to their surge, the notes had traded in the mid- to high 50s for much of the fourth quarter.

The retail space will be closely watched in 2023 as recession debates continue and defaults rise.

While some sources will be steering clear of the sector, others see potential if the positive earnings surprises that several retail companies delivered in 2022 continue.

© 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.