Pre-holiday trading thins; Bed Bath Beyond active; Carvana bonds drop; Lumen lower

By Cristal Cody

Tupelo, Miss., Feb. 17 – Bed Bath & Beyond Inc. and Carvana Co.’s paper saw some of the most active secondary trading on Friday in the distressed space.

Overall market and secondary activity stayed light on Friday ahead of the long holiday weekend, sources reported.

“Lot of people checked out today,” a market source said. “Just struggling to get something done.”

Bed Bath & Beyond’s 5.165% senior notes due 2044 (C/D) rose ¼ point as one of the day’s most active distressed issues on more than $7 million of volume.

The issue was down more than 5 points on the week.

“It’s deflated a little bit,” a source said Friday.

Carvana’s 10¼% senior notes due 2030 (Caa2/CCC) gave back 2¼ points over the session on $5 million of trading after the company’s stock target price got a bump from Wells Fargo & Co. and the company priced an asset-backed securitization offering.

Market tone was mixed on the light activity.

The S&P 500 index slipped 0.28%.

The CBOE Volatility index was down 0.74% at $20.02.

The iShares iBoxx High Yield Corporate Bond ETF added 29 cents to $74.56.

Lumen Technologies, Inc.’s 4½% notes due 2029 (B2/B+) stayed under pressure on Friday and were ending the week about 6 points softer.

Bed Bath & Beyond up

Bed Bath & Beyond’s 5.165% senior notes due 2044 (C/D) traded up ¼ point to 10¼ bid on $7.7 million of secondary action on Friday, a source said.

The issue has declined from trading at 15½ bid a week ago.

The distressed retailer’s bonds were still higher than where they traded at the 5 bid range before the company announced and priced a $225 million convertible preferred stock and warrants offering on Feb. 7.

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

Carvana bonds slip

Carvana’s 10¼% senior notes due 2030 (Caa2/CCC) shed 2¼ points to head out Friday at 55¼ bid, a source said.

The issue saw $5 million of secondary volume.

Carvana’s paper likely was moving on news that Wells Fargo raised its price target to $10 from $5, while the issuer also brought an asset-backed deal to the market, a source said.

The company offered $363.25 million Carvana Auto Receivables Trust 2023-P1 asset-backed notes. S&P Global Ratings gave the seven classes of notes ratings of AAA at the top of the structure to BBB in the class D tranche.

Carvana shares closed Friday up 4.12% at $11.37, well off their 52-week high of $156.68.

The Phoenix-based online car retailer will release fourth-quarter and fiscal 2022 results on Thursday.

Lumen softer

Lumen’s 4½% notes due 2029 (B2/B+) were 1 5/8 points lower on Friday at 51¾ bid on about $3.5 million of trading, a source said.

The notes stayed under pressure over the back half of the week and were going out about 6 points softer.

The issue was quoted mostly unchanged at 57¾ bid on Monday.

The Denver-based telecommunications company’s credit default swap spreads also widened 82 basis points over the week ended Wednesday to 1,372 bps, Moody’s reported.

Distressed index gains

S&P U.S. High Yield Corporate Distressed Bond index one-day returns improved on Thursday to 0.45% from minus 0.07% on Wednesday, 0.13% on Tuesday and 0.03% on Monday.

Month-to-date returns rose to 0.95% from 0.5% on Wednesday, 0.57% on Tuesday and 0.44% at the week’s start.

Quarterly and year-to-date total returns also were stronger at 9.01% on Thursday, compared to 8.52% on Wednesday, 8.6% on Tuesday and 8.46% 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.