DISH bonds mixed, 2024 notes slip; Frontera Energy, Plains paper lower; Lumen gains

By Cristal Cody

Tupelo, Miss., May 12 – Distressed secondary action slowed on Friday with DISH Network Corp.’s bonds among the most active issues.

DISH’s bonds were mixed with its shortest-dated tranche the most active and lower, while the satellite cable company’s other notes traded flat to about ½ point better.

Market tone declined on Friday with stock indices lower across the board.

The Nasdaq dropped 0.35%.

The iShares iBoxx High Yield Corporate Bond ETF softened 27 cents, or 0.36%, to $74.42.

The CBOE Volatility index, though, was only up by 0.41% at 17.00.

Distressed energy bonds from issuers including Frontera Energy Corp. and Plains All American Pipeline, LP fell about 2½ points to 3½ points as crude oil prices declined on Friday, a source said.

Frontera’s 7 7/8% senior notes due 2028 (//B) were quoted down about 3½ points on a 70 handle.

West Texas Intermediate crude oil benchmark futures for June deliveries settled down 83 cents to $70.04 a barrel.

Lumen Technologies, Inc. also stood out in the secondary market on Friday as one of the most active distressed names traded.

Lumen’s 4% senior secured notes due 2027 (B3/BB-) added 3/8 point on close to $10 million of secondary supply.

Subsidiary Level 3 Financing, Inc.’s 3 7/8% senior notes due 2029 (B1/B) were steady in lighter trading.

Defaults are ticking higher in May with four so far this month, following four defaults in April, one in March, and two each in February and January, according to a BofA Securities Inc. junk research note on Friday.

With the Chapter 11 bankruptcy filing from Lannett Co. Inc. earlier this month, the default rate rose 0.1 percentage point to 2.2%, BofA analysts said.

A “return of a 15% cumulative default rate is a distinct risk” but likely will remain just a risk for the foreseeable future, according to the note.

“In HY, the bottom 12% of most distressed names are trading at a weighted-average dollar price of 67 pts today,” the analysts said.

DISH paper mixed

DISH’ 5 7/8% senior notes due Nov. 15, 2024 (B3/B-) slipped 5/8 point to 81 7/8 bid in the strongest-traded tranche over the session, a source said Friday.

Volume totaled more than $14 million.

The bonds have declined from trading at 83¾ bid on Wednesday.

The company's other notes were unchanged to about ½ point higher in lighter secondary supply during the session.

Nearly $5 million of DISH’s 5¾% senior notes due 2029 (B3/B-) changed hands but were trading flat at 68¼ bid on Friday.

DISH DBS Corp.’s 7¾% senior notes due 2026 (B3/B-) picked up about ½ point to the 52½ bid area on $4.8 million of secondary trading.

Secondary supply in the name has been heavy over the week after the Englewood, Colo.-based satellite cable operator posted first-quarter results on Monday.

Lumen up, Level 3 steady

Lumen Technologies’ 4% senior secured notes due 2027 (B3/BB-) were one of the day’s gainers with the issue up 3/8 point at 67 1/8 bid on $10 million of secondary supply, a source said.

Bonds from Lumen subsidiary Level 3 Financing, which became a fallen angel in 2022, also were higher in active trading on Friday.

Level 3 Financing’s 3 7/8% senior notes due 2029 (B1/B) were mostly unchanged at the 57½ bid range on about $7 million of volume.

The Denver-based telecommunications company conducted a distressed debt exchange in April.

Distressed returns positive

S&P U.S. High Yield Corporate Distressed Bond index one-day returns remained positive on Thursday at 0.24% but down from 0.37% on Wednesday.

Month-to-date total returns improved to 0.19% by Thursday from minus 0.06% midweek.

Year-to-date total returns also rose to 7.53% from 7.27% on Wednesday.

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