Bausch, Community Health paper under pressure; Diamond Sports flat; Sinclair gains

By Cristal Cody

Tupelo, Miss., Feb. 10 – Distressed bonds in the health care space came under pressure over Friday’s session.

Bausch Health Cos. Inc.’s 8½% senior notes due 2027 (Ca/CCC/CC) slid 3 points to drop below a 50 handle on Friday.

CHS/Community Health Systems, Inc.’s paper also declined ahead of the company’s earnings release next week.

CHS/Community Health’s 6 1/8% senior secured notes due 2030 (Caa2/CCC) were down 2 points.

Market tone was mixed.

The iShares iBoxx High Yield Corporate Bond ETF fell 60 cents, or 0.80%, to $74.76 on nearly double the average trading volume.

The ‘Fear Factor’ index was lower on the day.

The CBOE Volatility index declined 0.68% to $20.57.

While Diamond Sports Group LLC’s paper has edged up in distressed trading on growing default chatter, paper from parent affiliate Sinclair Television Group, Inc. also improved this week.

Sinclair’s 5½% senior notes due 2030 (B2/B-) went out nearly 3 points better on the week on $28 million of volume.

Diamond Sports’ paper was little changed on the week at under 10 bid.

In addition to the media space, telecom paper has been under pressure so far in 2023, sources report.

A default from satellite communications company Ligado Networks, LLC is anticipated with $1.3 billion of debt trading at the 12 bid average area, according to a BofA Securities research report on Friday.

Bausch paper down

Bausch Health Americas, Inc.’s 8½% senior notes due 2027 (Ca/CCC/CC) slid 3 points to trade at 49¾ bid, according to a market source on Friday.

The bonds were moving with a 54 bid handle in December.

Bausch will release its fourth-quarter and fiscal 2022 results on Feb. 23.

The Laval, Quebec-based pharmaceutical company completed a distressed debt exchange in 2022.

CHS paper lower

CHS/Community Health’s 6 1/8% senior secured notes due 2030 (Caa2/CCC) fell 2 points to trade at 61¾ bid, a source said Friday.

The notes have improved so far in 2023 from where the issue was seen in November at 42½ bid.

The Franklin, Tenn.-based operator of acute care and outpatient facilities will report fourth-quarter and fiscal 2022 earnings on Wednesday.

Sinclair, Diamond Sports up

Sinclair’s 5½% senior notes due 2030 (B2/B-) traded 2.82 points higher this week at 82.3 on $28 million of volume, BofA said Friday.

Diamond Sports tops the list of default candidates with $4.78 billion face amount of debt trading around 5 bid, according to the BofA report.

Diamond Sports’ paper was little changed from the prior week, a source said.

The company’s 5 3/8% senior secured notes due 2026 (Caa3/CCC-) were last seen trading at 9½ bid on Thursday. The bonds were quoted at 9¼ bid a week ago.

Diamond Sports’ 6 5/8% senior notes due 2027 (Ca/C) were moving with a 3 bid handle this week, slightly better than where the issue traded at 2 7/8 bid in the prior week.

The Chesapeake, Va.-based sports broadcast company has a $140 million interest payment due in February, according to a Fitch Ratings note.

Diamond Sports was deconsolidated from parent Sinclair Broadcast Group Inc.’s financial statements in 2022.

Distressed index soft

S&P U.S. High Yield Corporate Distressed Bond index one-day returns remained soft on Thursday but improved to minus 0.04% from minus 0.1% on Wednesday. One-day returns were 0.63% on Tuesday and minus 0.69% on Monday.

Month-to-date returns were 1.61% on Thursday, compared to 1.65% on Wednesday, 1.76% on Tuesday and 1.12% at the start of the week.

Quarterly and year-to-date total returns softened to 9.73% on Thursday from 9.77% on Wednesday and 9.89% on Tuesday. Returns were at 9.2% on Monday.

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