QVC notes improve; First Republic, Huntington Bancshares soften; Home Point rallies

By Cristal Cody

Tupelo, Miss., April 10 – Retail and financial paper continued to remain in distressed cross-hairs with a downgrade Friday from Kohls Corp., though trading stayed mostly quiet in the first post-Good Friday holiday session.

Home shopping network QVC Inc.’s paper stayed active with the bonds about 1½ points to 2 points better on more than $6 million of notes changing hands, a source said.

The company’s 5.45% senior secured notes due 2034 (B2/B-/B+) were nearly 2 points better.

First Republic Bank’s 4 3/8% subordinated notes due 2046 (B2/B-) softened about 1 point in thin trading.

Huntington Bancshares Inc.’s 5.7% series E fixed-to-floating rate non-cumulative perpetual preferred stock (Baa3/BB+) also dropped more than 1¼ points in light trading on Monday.

Mortgage company Home Point Capital Inc.’s 5% senior notes due 2026 (Caa1//CCC+) rallied 4 points in the first session after its news release on Friday that it will sell its wholesale originations business.

The company’s bonds were moving on $10 million of secondary action on Monday in one of the most active distressed notes traded, a source said.

Energy paper dipped with oil lower and bonds from issuers including Nabors Industries Inc. down more than 1 point in light activity, a source said.

Brent crude oil deliveries for May declined 96 cents to $79.74 a barrel.

Stocks closed mostly better as the week kicked off. The Nasdaq was down 0.03%.

The iShares iBoxx High Yield Corporate Bond ETF dipped 7 cents to $74.77.

The CBOE Volatility index was 3.1% higher on Monday at 18.97.

Distressed health care paper stayed soft over the session, sources said.

Community Health Systems Inc.’s 6 1/8% senior secured notes due 2030 (Caa2/CCC-) traded down 2 points to 60¼ bid on $4.6 million of activity.

QVC trades up

QVC’s notes traded about 1½ points to 2 points better on Monday on more than $6 million of secondary supply, a source said.

The company’s 5.45% senior secured notes due 2034 (B2/B-/B+) were nearly 2 points better with a high 38 bid handle on $3.1 million of volume.

QVC’s 5.95% senior secured notes due 2043 (B2/B-/B+) also added 1½ points to head out at 38½ bid on $3 million of trading.

West Chester, Pa.-based home shopping network company parent company Qurate Retail Inc.’s credit default swap spreads tightened nearly 200 basis points last week.

First Republic, Huntington lower

In distressed financial paper, First Republic Bank’s 4 3/8% subordinated notes due 2046 (B2/B-) softened about 1 point to a 53 bid handle in thin trading, a source said.

The San Francisco-based bank’s stock closed up 0.93% at $14.16.

Huntington Bancshares’ 5.7% series E fixed-to-floating rate non-cumulative perpetual preferred stock (Baa3/BB+/BB+) dropped more than 1¼ points to the 85½ bid area on $1 million of trading on Monday, according to the market source.

The securities were yielding more than 74%.

The Columbus, Ohio-based bank will release its first-quarter earnings report on April 20.

Huntington Bancshares’ stock was up 0.98% at $11.30.

Home Point gains

Home Point Capital’s 5% senior notes due 2026 (Caa1//CCC+) rallied 4 points to 78 5/8 bid on $10 million of secondary action on Monday, a source said.

Subsidiary Homepoint announced Friday that it entered into a definitive agreement to sell certain assets of its wholesale originations channel to wholesale lender the Loan Store, Inc. of Tucson. The deal is expected to close in the second quarter.

The Ann Arbor, Mich.-based residential mortgage company said it will have an equity interest in the Loan Store.

On Monday, Fitch Ratings announced it downgraded the issuer and Home Point Financial Corp. to B- from B and dropped the senior notes to CCC+ from B- in response to the company’s report.

Distressed returns soft

S&P U.S. High Yield Corporate Distressed Bond index one-day returns were 0.07% in the holiday-shortened session on Friday.

Month-to-date returns stayed soft on Friday at minus 0.17%.

Year-to-date total returns finished the week at 4.35%.

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