Bed Bath & Beyond notes soften; Diamond Sports, Diebold up; Team Health, Bausch active

By Cristal Cody

Tupelo, Miss., Feb. 13 – Distressed secondary action picked up Monday with several names, including Bed Bath & Beyond Inc., Diamond Sports Group LLC and Diebold Nixdorf Inc., trading over the session.

Bed Bath & Beyond’s notes moved lower on Monday after the paper was lifted last week following the company’s offering of convertible preferred stock and warrants.

The retailer’s 5.165% senior notes due 2044 (C/D) declined 2¾ points.

Diamond Sports Group’s 5 3/8% senior secured notes due 2026 (Caa3/CCC-) traded 1/8 point higher during the session on $7.5 million of supply with chatter of a potential Chapter 11 bankruptcy filing growing louder.

Cinema advertising operator National CineMedia, LLC’s 5¾% senior notes due 2026 (Ca/C) were active also and trading at a 3 bid handle.

Diebold Nixdorf’s 9 3/8% senior secured notes due 2025 (Caa2/CCC+) improved 1¼ points in thin trading after the ATM manufacturer on Friday launched an exchange offer for its 8½% senior notes due April 15, 2024.

Stocks were higher on Monday in front of January’s inflation data report due Tuesday.

The S&P 500 index closed up 1.14%.

The iShares iBoxx High Yield Corporate Bond ETF improved 20 cents, or 0.27%, to $74.98.

Volatility was marginally lower.

The CBOE Volatility index edged down 0.68% to $20.39.

Distressed health care paper mostly improved in light volume on Monday.

Team Health Holdings, Inc.’s 6 3/8% senior notes due 2025 (Caa3/CCC/CCC-) rallied 5¼ points.

Bausch Health Cos. Inc.’s notes traded about ½ point to 1 point higher. The 11% senior secured first-lien notes due 2028 (Caa1/B-/B) were more than ½ point better on the day.

Envision Healthcare Corp.’s 8¾% senior notes due 2026 (C/CC) also were busy with $8 million of volume reported.

Bed Bath & Beyond down

Bed Bath & Beyond’s 5.165% senior notes due 2044 (C/D) declined 2¾ points to 12¾ bid on $4 million of secondary trading on Monday, a source said.

In the same session a week ago, the bonds traded at 5 bid to 10 bid on the eve of the company’s offering.

Bed Bath & Beyond reported proceeds of approximately $225 million from the convertible offering and used the proceeds to stave off defaults in its loans and bonds. The company also expects an additional $800 million of proceeds through the exercise of warrants.

The Union, N.J.-based home products retailer is expected to use availability under its credit facilities from the preferred offering to pay missed interest payment on its senior notes by March 3.

Diamond Sports edges up

Diamond Sports’ 5 3/8% senior secured notes due 2026 (Caa3/CCC-) were trading 1/8 point higher on Monday at 9 7/8 bid, a market source said.

The issue was active on $7.5 million of secondary supply.

Bankruptcy chatter was growing on Monday with a debt payment looming this month for the Chesapeake, Va.-based sports broadcast company.

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

National CineMedia trades

National CineMedia’s 5¾% senior notes due 2026 (Ca/C) were quoted moving in the secondary market on Monday on a 3 bid handle, a source said.

The Centennial, Colo.-based cinema advertising company’s bonds were active on $3 million of notes traded.

Diebold improves

Diebold Nixdorf’s 9 3/8% senior secured notes due 2025 (Caa2/CCC+) improved 1¼ points during the session, but trading was thin, a source said.

The issue was quoted at 69½ bid on less than $1 million of secondary activity.

The ATM manufacturer on Friday launched an exchange offer for all $72 million outstanding of its 8½% senior notes due April 15, 2024 for new senior secured PIK toggle notes and warrants to purchase common shares.

The exchange offer expires March 24.

Diebold Nixdorf on Thursday reported heavy fourth-quarter losses.

The Hudson, Ohio-based financial and retail technology company conducted exchange offers in December for the 8½% notes, 9 3/8% notes and the 9% euro-denominated senior secured notes due 2025 issued by Diebold Nixdorf Dutch Holding BV.

Team Health gains

Team Health’s 6 3/8% senior notes due 2025 (Caa3/CCC/CCC-) traded 5¼ points higher on Monday to a quote of 71¼ bid, a source reported.

While the issue was better on the day, trading volume was light at $2 million.

The Knoxville, Tenn.-based medical staffing firm is owned by Blackstone Group LP.

Bausch notes higher

Bausch’s notes were seen trading about ½ point to 1 point higher in heavy volume, a source said.

The 11% senior secured first-lien notes due 2028 (Caa1/B-/B) picked up more than ½ point by the day’s end on $8 million of paper changing hands.

The bonds were quoted around 74 bid.

Bausch’s 6 1/8% notes due 2027 (Caa1/B-) rose ¾ point to a 65 bid handle on $4.8 million of volume on Monday.

The Laval, Quebec-based pharmaceutical company will release its fourth-quarter and fiscal 2022 results on Feb. 23.

Envision bonds active

Envision Healthcare’s 8¾% senior notes due 2026 (C/CC) went out at 25¾ bid in strong trading action on Monday, a source said.

Secondary volume totaled $8 million.

The Nashville-based health care company and hospital-based physician group conducted two distressed exchanges in 2022.

Distressed returns decline

S&P U.S. High Yield Corporate Distressed Bond index one-day returns ended Friday weaker at minus 1.18%.

One-day returns were minus 0.04% on Thursday, minus 0.1% on Wednesday, 0.63% on Tuesday and minus 0.69% at the prior week’s start.

Month-to-date returns softened to 0.41% on Friday versus 1.61% on Thursday, 1.65% on Wednesday, 1.76% on Tuesday and 1.12% at the start of the week.

Quarterly and year-to-date total returns ended the prior week at 8.43%, down from 9.73% on Thursday, 9.77% on Wednesday, 9.89% on Tuesday and 9.2% in the Feb. 6 session.

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