Distressed retail mixed in thin trading; QVC, Qurate edge up; 99 Cents quiet; Michaels slips

By Cristal Cody

Tupelo, Miss., April 4 – The day’s news was centered on former U.S. president Donald Trump’s arrest and his not-guilty plea to 34 felony charges, while the financial markets ignored much of the noise and priced bond deals in both the high-grade and junk spaces Tuesday.

Distressed paper was edging up in lighter trading, sources said.

Paper from QVC Inc. and parent Qurate Retail Inc. improved about ¼ point to ½ point.

QVC’s 5.45% senior secured notes due 2034 (B2/B-) rose ½ point.

99 Cents Only Stores LLC’s 7½% senior secured notes due 2026 (Caa2/CCC) were quiet Tuesday and remained soft in the low 40s after the notes were downgraded during the session.

Michaels Cos., Inc.’s 7 7/8% senior notes due 2029 (Caa2/CCC) traded about ¼ point lower in thin secondary volume.

Market tone was soft over the session as Treasury yields dropped.

The benchmark 10-year Treasury note yield declined 9 basis points to 3.33%.

The CBOE Volatility Index moved up 4.53% to 19.39.

The S&P 500 index closed down 0.58%.

The iShares iBoxx High Yield Corporate Bond ETF went out 22 cents lower at $74.93.

QVC, Qurate up

QVC’s 5.45% senior secured notes due 2034 (B2/B-) rose ½ point to 39 bid in mostly light secondary trading Tuesday, a source reported.

Paper from the home shopping network’s parent also was improved in light supply over the day.

Qurate Retail’s 8½% senior notes due 2029 (Caa2/CCC-) added ¼ point to 26¾ bid.

Both S&P Global Ratings and Fitch Ratings downgraded the West Chester, Pa.-based company in March.

99 Cents inactive

99 Escrow Issuer Inc.’s 7½% senior secured notes due 2026 (Caa2/CCC) were quiet Tuesday and last seen trading a week ago on a 41 bid handle, according to a market source.

The issue is down about 10 points since the start of the year.

S&P said Tuesday it raised the rating on 99 Cents Only Stores to CCC from selective default following the company’s preferred dividend payouts, but cut the rating on the $350 million issue of secured notes to CCC from B-.

The discount retailer is based in Commerce, Calif.

Michaels’ notes dip

Also Tuesday, Michaels Stores’ 7 7/8% senior notes due 2029 (Caa2/CCC) traded about ¼ point softer at 69¾ bid in thin activity, a source said.

The notes gave back about 5 points in March.

The Irving, Tex.-based arts and crafts retailer was taken private in 2021 by funds managed by Apollo Global Management, Inc. affiliates.

April distressed index starts positive

S&P U.S. High Yield Corporate Distressed Bond index one-day returns started the first session of April at 0.62% on Monday.

One-day returns were down from Friday’s 0.9% but up from 0.37% returns in the same session a week ago.

Year-to-date total returns on Monday were 5.17%, improved from 4.52% on Friday.

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