DISH paper improves; QVC bonds dip; Qurate on mend; At Home drops; Lumen, Level 3 gain

By Cristal Cody

Tupelo, Miss., April 21 – DISH Network Corp.’s and QVC Inc.’s bonds saw strong trading action on Friday in otherwise mostly quiet distressed secondary activity.

DISH DBS Corp.’s 5 7/8% senior notes due 2024 (B3/B) recovered 1 7/8 points on more than $16 million of trading after dropping more than 1 point on Thursday.

Home shopping network QVC’s 4.45% senior secured notes due 2025 (B2/B-) edged ¼ point lower on $12.5 million of volume, while parent company’s Qurate Retail Inc.’s 8¼% senior notes due 2030 (Caa2/CCC-) added more than 1¼ points in lighter trading.

In other distressed retail paper, home decor company At Home Group, Inc.’s 7 1/8% senior notes due 2029 (Caa3/CCC-) slid 5 points by the afternoon.

Market tone improved over the day with stock indices eking out gains.

The S&P 500 index rose 0.09%.

The iShares iBoxx High Yield Corporate Bond ETF added 23 cents, or 0.31%, to $74.99.

The CBOE Volatility index retreated on Friday, going out 2.33% lower at 16.77.

Bonds from Lumen Technologies, Inc. and subsidiary Level 3 Financing, Inc. improved on steady trading.

Lumen Technologies’ 4% senior secured notes due 2027 (B3/BB-) rose more than ¼ point, while Level 3 Financing’s 4 5/8% senior notes due 2027 (B1/B) added 3 3/8 points on Friday.

“Lumen Tech is the latest defaulter” with its distressed debt exchange of $1.5 billion of bonds into $1.1 billion of new notes, BofA Securities high-yield analysts said in a report Friday.

Year-to-date defaults have totaled $8.4 billion, BofA said.

Moody’s Investors Service said in reports this week that distressed exchanges are expected to remain “elevated” after the form of debt restructuring jumped to 72% of all corporate defaults in 2022 from about 50% in 2020.

The agency said its baseline forecast is calling for an increase in the U.S. default rate to 5.6%, from the current 2.7%.

DISH improves

DISH’s 5 7/8% senior notes due 2024 (B3/B) climbed 1 7/8 points to 82 5/8 bid on more than $16 million of trading on Friday, a source said.

The issue was last seen Thursday down 1 3/8 points on more than $25 million of secondary activity.

The Englewood, Colo.-based satellite cable operator’s credit default swap spreads eased more than 200 basis points in the week ended Wednesday, according to a Moody’s note.

QVC, Qurate mixed

QVC’s 4.45% senior secured notes due 2025 (B2/B-/B+) dropped ¼ point to 75 bid on $12.5 million of trading on Friday, a market source said.

Meanwhile, parent Qurate Retail’s 8¼% senior notes due 2030 (Caa2/CCC-) traded up more than 1¼ points to 28¾ bid on $2.85 million of supply during the session.

The company’s CDS spreads tightened 293 bps over the past week ended Wednesday, Moody’s said.

The West Chester, Pa.-based home shopping network owner will release first-quarter earnings results on May 5.

At Home bonds drop

At Home Group’s 7 1/8% senior notes due 2029 (Caa3/CCC-) were under pressure on Friday with the notes quoted down 5 points by the afternoon at 56 bid on about $6 million of volume, a source said.

The company on Monday announced the launch of a new private brand.

The Dallas-based issuer operates a chain of 262 home decor and furniture stores in 40 states.

Lumen, Level 3 active

Lumen Technologies’ 4% senior secured notes due 2027 (B3/BB-) improved more than ¼ point to 67 bid on $5 million of volume on Friday, a source said.

Level 3 Financing’s bonds were trading about 1¾ points to 5 points better during the session.

The 3 7/8% senior notes due 2029 (Ba2/BB-) rose about 2¾ points to 74½ bid on $3.45 million of supply.

The 4 5/8% senior notes due 2027 (B1/B) added 3 3/8 points to 65 7/8 bid on $6.5 million of volume on Friday.

Lumen’s CDS spreads improved over the past week ended Wednesday, Moody’s said. The company’s CDS spreads came in 159 bps to 2,097 bps.

In March, Level 3 launched an offer to exchange eight series of senior notes for up to $1.1 billion of new 10½% senior secured notes due 2030 that expired on April 13.

After the early deadline on March 29, the company reported it would issue $915 million of new notes for $1.5 billion of existing notes.

The Denver-based telecommunications company on Monday announced Level 3 issued $9.4 million of additional new 10½% senior secured notes due 2030 in exchange for $19 million of notes tendered after the early deadline.

Lumen will report first-quarter earnings results on May 2.

Distressed returns soft

S&P U.S. High Yield Corporate Distressed Bond index one-day returns improved but remained soft on Thursday at minus 0.06%.

One-day returns were minus 0.34% on Wednesday, 0.32% on Tuesday and minus 0.06% on Monday.

Month-to-date returns fell to 1.53% from 1.59% on Wednesday, 1.93% on Tuesday and 1.61% at the week’s start.

Year-to-date total returns were lower at 6.12% in the prior session, compared to 6.18% on Wednesday, 6.54% on Tuesday and 6.2% on Monday.

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