Distressed secured paper softens; Bausch Health, iHeartMedia lower; index returns up

By Cristal Cody

Tupelo, Miss., May 24 – Just one tranche from Bausch Health Cos. Inc. saw strong secondary action Wednesday, but the bonds went out as the most traded issue seen in the distressed secondary market.

Bausch’s 4 7/8% senior secured notes due 2028 (Caa1/CCC+/B) have declined more than 2 points over the last three sessions.

In the distressed media space, iHeartMedia, Inc.’s bonds also were active on more than $14 million of trading during the session.

The company’s notes have softened about 2 points to 3 points so far this week.

In the broader markets, stocks were down on the day following the release of minutes from the Federal Reserve’s May 2-3 monetary policy meeting, while Congressional discussions remained ongoing ahead of a possible U.S. debt default in June.

The S&P 500 index closed off 0.73%.

The iShares iBoxx High Yield Corporate Bond ETF fell 51 cents, or 0.69%, to $73.63.

The CBOE Volatility index moved above a 20 handle, rising 8.26% to 20.63.

AMC Entertainment Holdings, Inc.’s paper also extended declines on Wednesday.

AMC Entertainment’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) shed ½ point after giving back ¼ point in the prior session.

Bausch notes down

Bausch’s 4 7/8% senior secured notes due 2028 (Caa1/CCC+/B) slipped ¾ point in strong trading supply totaling about $12 million on Wednesday, a source said.

The notes were quoted at 61 bid.

Bausch’s issue has declined about 2 1/8 points this week.

The Laval, Quebec-based pharmaceutical company’s paper improved in 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.

iHeartMedia weakens

iHeartMedia’s 5¼% senior secured notes due 2027 (B1/BB-) traded Wednesday at 69¼ bid on $8.5 million of supply, a source reported.

The bonds have declined 2 points since Friday.

iHeartMedia’s 6 3/8% senior secured notes due 2026 (B1/BB-) also have softened this week, going out with a 75 bid handle on $6 million of volume.

The notes were quoted Friday at 77 bid.

The San Antonio-based media broadcasting company reported heavy first-quarter losses earlier in May.

AMC dips second day

AMC Entertainment’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) went out down ½ point at 61¾ bid on $6.4 million of trading on Wednesday, a source said.

The notes declined ¼ point in the prior session.

AMC is awaiting a court decision in the Delaware Court of Chancery regarding a settlement in a shareholder lawsuit brought by Allegheny County Employees’ Retirement System over the company’s issuance of preferred stock.

The Leawood, Kan.-based movie theater owner’s common stock declined 3% to $4.88 on Wednesday.

AMC’s preferred shares closed up 1¼% at $1.62.

Distressed index up

S&P U.S. High Yield Corporate Distressed Bond index one-day returns continued to improve on Tuesday, finishing higher at 0.17% compared to 0.14% on Monday.

Month-to-date total returns improved to minus 0.18% from minus 0.35% at the start of the week.

Year-to-date total returns moved up to 7.13% on Tuesday from 6.95% on Monday.

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