Western Global Airlines notes limp back from plunge; SVB paper up; Bausch Health better

By Cristal Cody

Tupelo, Miss., April 19 – Western Global Airlines Inc.’s 10 3/8% senior notes due 2025 (Caa2/CCC-/B) recovered 2 points on Wednesday but remained off about 30 points from where the issue traded last week.

“Today, a lot traded,” a source said.

The air cargo company’s bonds were going out about 2¼ points better on the high end of trading during the session.

The bonds sank to below 10 bid over Tuesday’s session.

Western Global Airlines was downgraded in February and March on growing chances the company may consider a distressed debt restructuring over the next year.

In the broader market, stocks were little changed on Wednesday as volatility waned. The CBOE Volatility index declined 2.26% to 16.45.

The S&P 500 index edged down 0.01%.

The iShares iBoxx High Yield Corporate Bond ETF dropped 29 cents, or 0.39%, to $74.84.

Bank paper remained in focus with the high-grade primary market hosting new supply from issuers including Bank of New York Mellon Corp. and Morgan Stanley, among the first financial issuers since the banking crisis was sparked in March.

Bankrupt SVB Financial Group’s notes traded flat to higher on Wednesday, while its stock shot up nearly 70%.

The 1.8% senior notes due 2026 rallied about 2¼ points over the session.

In other distressed paper, Bausch Health Cos. Inc.’s bonds were trading about 1 point to 1½ points stronger.

Bausch’s 7¼% senior notes due 2029 (Ca/CCCC-/CC) improved nearly 1 point.

Western Global eyed

Western Global Airlines’ 10 3/8% senior notes due 2025 (Caa2/CCC-/B) traded 2 points better on Wednesday but remained weak after plunging on Tuesday, a source said.

The notes were quoted at 12 bid on Wednesday on $7 million of paper traded.

The issue bounced around 9¾ bid to 12 bid over the session, the source said.

Western Global Airlines’ bonds were last seen in the prior week around the 41½ bid area and sank on Tuesday to 9¾ bid to 10 bid.

The Estero, Fla.-based air cargo transportation services company was downgraded in February and March by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings based on deteriorating liquidity, weaker operating performance and higher capital expenditures and the increased chance the company may consider a distressed debt restructuring over the next year.

Fitch noted the company has a $21 million coupon payment in August.

The private company had announced in February plans to purchase two 777-F aircraft from the Boeing Co., but that was aborted and the company will receive a return of certain deposits, Moody’s noted in March.

SVB notes higher

SVB Financial Group’s 1.8% notes due 2026 climbed about 2¼ points to 66¼ bid in active trading on Wednesday, a source said.

The company’s 1.8% notes due 2031 went out unchanged around 55½ bid and were trading about 2 points higher this week.

SVB’s Silicon Valley Bank was among three banks that failed in March.

The Federal Deposit Insurance Corp. seized the company’s 17-branch Silicon Valley Bank in Santa Clara, Calif.

SVB filed for Chapter 11 bankruptcy following the bank collapse in March.

SVB’s stock, trading over the counter, climbed 69.24% to 93 cents on Wednesday.

Bausch bonds gain

Bausch’s Health’s 7¼% senior notes due 2029 (Ca/CCCC-/CC) went out Wednesday at 43½ bid, nearly 1 point better on $8 million of secondary supply, a source said.

Bausch Health Americas, Inc.’s 8½% senior secured notes due 2027 (Ca/CCC-/CC) were 1½ points better at 50 bid in lighter volume totaling $1.9 million.

The secured issue was quoted up ¼ point early in the session.

The Laval, Quebec-based pharmaceutical company’s stock improved 0.94% to $7.53.

Distressed returns improve

S&P U.S. High Yield Corporate Distressed Bond index one-day returns increased on Tuesday to 0.32% from minus 0.06% on Monday.

Month-to-date returns improved to 1.93% in the prior session from 1.61% at the week’s start.

Year-to-date total returns rose to 6.54% from 6.2% in the week’s first session.

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