Bausch paper rallies; Allen Media up; WeWork drops; Transocean gains; BB&B soft

By Cristal Cody

Tupelo, Miss., April 3 – Distressed paper from Bausch Health Cos. Inc. and Allen Media LLC finished at the top of active secondary trading Monday, sources said.

Bausch Health’s 4 7/8% senior secured notes due 2028 (Caa1/CCC+/B) rose 1½ points on $12 million of volume.

Allen Media’s 10½% senior notes due 2028 (Caa1/CCC) climbed 4 points to 56½ bid on $12.7 million of supply.

Elsewhere, Transocean Ltd.’s 7½% notes due 2031 (Caa3/CCC) were up 2¼ points at 78¼ bid as oil prices rallied on announced production cuts, a source said.

Crude oil May deliveries settled $4.75 higher at $80.42 a barrel.

Stocks were mostly stronger. The S&P 500 index edged up 0.37%.

The iShares iBoxx High Yield Corporate Bond ETF was down 6 cents at $75.15.

Volatility was little changed. The CBOE Volatility index was off 0.64% at 18.58.

WeWork Inc.’s notes declined about 2 to 2½ points after the company launched exchange offers and consent bids for two tranches of notes.

Bed Bath & Beyond Inc. paper softened further Monday as the company’s chances to stave off a Chapter 11 bankruptcy filing were absorbed, market sources said.

The distressed retailer’s 3.749% senior notes due 2024 were down about ¾ point and trading around 10 bid in thin supply.

The paper was last seen Thursday at 15 bid.

Alex Arnold, an analyst with Odeon Capital Group LLC, said in a Feb. 7 note to “take the money and run” regarding Bed Bath & Beyond.

“That said, we continue to believe that the inherent value of the company’s collective assets could be significantly higher than the current market value of its debt, suggesting that current trading levels of the debt may present significant upside for investors that should be viewing unsecured notes more like equity at this point,” Arnold said.

Bed Bath & Beyond said last week that if the company does not receive proceeds from a new $300 million equity offering announced Thursday, the issuer likely will file for bankruptcy protection.

The Union, N.J.-based home products retailer’s stock sank 10% to 38 cents Monday.

Bausch paper posts gains

Bausch Health’s 4 7/8% senior secured notes due 2028 (Caa1/CCC+/B) rose 1½ points to 61 bid on $12 million of volume Monday in one of the most active distressed issues trading, a source said.

The company’s paper was seen trading stronger across other short-dated tranches.

Bausch’s 11% senior secured notes due 2028 (Caa1/CCC+/B) went out more than 1 point better at 75 bid on $8.75 million of volume.

Bausch Health Americas, Inc.’s 9¼% senior notes due 2026 (Ca/CCC-/CC) traded over 2¾ points higher at 78 bid on $3 million of activity.

The Laval, Quebec-based pharmaceutical company’s shares dropped 3.7% to $7.80 Monday.

WeWork declines

WeWork’s 7 7/8% senior notes due 2025 (CC/C) declined 2½ points to head out at 52¾ bid on $3 million of trading Monday, a source said.

The 5% senior notes due 2025 (//C) also fell 2 points to 50½ bid.

WeWork, on Monday, announced exchange offers for both tranches of notes until May 1.

The New York-based office share company announced in March it has entered into a series of agreements with an ad hoc group representing a majority of bondholders and its largest shareholder, SoftBank Group Corp., to reduce its net debt by approximately $1.5 billion, extend a debt maturity wall from 2025 to 2027 and provide new funding and new and rolled capital commitments of more than $1 billion.

March distressed returns weak

S&P U.S. High Yield Corporate Distressed Bond index one-day returns improved to finish Friday at 0.9%, up from 0.45% on Thursday, 0.48% Wednesday, minus 0.44% Tuesday and 0.37% at the prior week’s start.

March bond index returns finished at minus 4.2%, down from February returns of 1.03%.

The first quarter and year-to-date index total returns wrapped March at 4.52%.

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