Bausch Health gives back some gains; LifePoint notes mixed; Rite Aid little changed

By Cristal Cody

Tupelo, Miss., May 22 – Junk and distressed names in the health care space saw renewed secondary action Monday, a week after Envision Healthcare Corp. filed for Chapter 11 bankruptcy.

Bausch Health Cos. Inc. kicked the week off giving back some of the prior week’s gains.

The issuer’s bonds were trading mostly flat to more than 1 point weaker on Monday.

Bausch’s most active issue seen trading over the session was the 4 7/8% senior secured notes due 2028, which were down 5/8 point on more than $10 million of volume.

LifePoint Health, Inc.’s senior paper also was active on Monday with the issuer’s notes trading flat to ½ point better on more than $7 million of supply.

Rite Aid Corp.’s notes also were moving in the secondary market on Monday. The company’s 8% senior secured notes due 2026 (Caa3/CCC-/CCC) were little changed from April.

Markets were taking direction from continued focus on the federal debt limit talks as the June 1 U.S. debt default deadline approaches, though most expect a deal to be reached, a source said.

This week also is expected to wrap up most of the first-quarter earnings season with more than 500 companies expected to post financial results and more than 90% of S&P 500 companies already reported, market sources said.

Volatility was slightly higher on the day. The S&P 500 index closed up 0.02%.

The CBOE Volatility index rose 2.56% to 17.24.

The iShares iBoxx High Yield Corporate Bond ETF picked up 33 cents, or 0.44%, to $74.53.

Junk bank and financial paper was mixed with perpetual securities from Wells Fargo & Co. and Goldman Sachs Group Inc. up about 2½ points to 3 points on Monday, while Citigroup Inc. and Barclays perpetual notes declined about 1¼ points in light trading, a source said.

Bausch notes slip

Bausch’s paper mostly softened on Monday in steady secondary action, a market source said.

Bausch 5¾% senior secured notes due 2030 (Caa3/CCC-/B) fell more than 1½ points to 65¼ bid on $5 million of trading.

The 14% senior secured second-lien notes due 2030 (Caa3/CCC-/B-) were down about 1½ points at the 64½ bid area on $1.4 million of volume.

The 4 7/8% senior secured notes due 2028 (Caa1/CCC+/B) slipped 5/8 point to 62½ bid in the strongest traded issue on Monday on $10.2 million of volume.

Bausch’s 5¼% senior notes due 2031 (Ca/CCC-/CC) fell ¼ point to 44¼ bid on $7.87 million of trading.

The 6 1/8% senior notes due 2027 (Caa1/CCC-) were flat over the session at 67½ bid on $5.4 million of trading.

The Laval, Quebec-based pharmaceutical company’s paper mostly improved over the back half of the prior week after Bausch reported a favorable court ruling from the U.S. District Court of Delaware in a lawsuit against Norwich Pharmaceuticals, Inc.

LifePoint flat to higher

LifePoint Health’s paper traded flat to ½ point better on Monday, according to a market source.

The 9¾% senior notes due 2026 (Caa1/CCC-) went out steady at 79 bid on $4 million of trading.

LifePoint’s 5 3/8% senior notes due 2029 (Caa1/CCC-) rose ½ point to 53¼ bid on $3.8 million of secondary activity.

The health care services company is based in Brentwood, Tenn.

Rite Aid bonds trade

Rite Aid’s 8% senior secured notes due 2026 (Caa3/CCC-/CCC) were quoted moving Monday with a 52 bid handle.

The bonds saw $4 million of trading but were little changed from the prior month, a source said.

The notes traded with a 50 handle in April.

The Camp Hill, Pa.-based drugstore chain’s stock was unchanged at $1.99.

Distressed index higher

S&P U.S. High Yield Corporate Distressed Bond index one-day returns ended Friday better at 0.11% versus 0.07% on Thursday, minus 0.07% on Wednesday, minus 0.09% on Tuesday and minus 0.11% at the start of the prior week.

Month-to-date total returns improved to minus 0.5% from minus 0.61% on Thursday, minus 0.68% on Wednesday, minus 0.61% on Tuesday and minus 0.52% at the week’s start.

Year-to-date total returns went out higher on Friday at 6.79%, compared to 6.67% on Thursday, 6.6% on Wednesday, 6.67% on Tuesday and 6.77% in the first session of the week.

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