QVC, Qurate bonds gain on divestiture; Diebold drops as exchange offer doubts swirl

By Cristal Cody

Tupelo, Miss., May 25 – Bonds from QVC Inc. and parent Qurate Retail Inc. rallied about 3 points in some of the day’s most active distressed issues trading on Thursday.

The gains came a day after Qurate Retail announced that it sold online retailer Zulily to Los Angeles-based investment firm Regent, LP.

QVC’s 4¾% notes due 2027 (B2/B-) traded about 3 points higher on more than $11 million of activity.

Qurate Retail’s bonds also climbed more than 2 points.

The 8½% senior notes due 2029 (Caa2/CCC-) added about 3 points.

Elsewhere, distressed issuer Diebold Nixdorf Inc. was one of the day’s weaker distressed names, a source said.

Diebold Nixdorf’s 8½% senior notes due 2024 (Ca/CC) fell more than 3¾ points.

Trading volume was slowing on Thursday as desks start to thin early ahead of the Memorial Day holiday weekend, according to market sources.

Stocks saw some recovery with volatility lower following losses on Wednesday after Fitch Ratings placed the United States’ AAA rating on rating watch negative with the lack of a Congressional agreement ahead of a possible June debt default weighing on markets.

The Nasdaq closed up 1.71%.

The iShares iBoxx High Yield Corporate Bond ETF softened 5 cents, or 0.07%, to $73.57.

The CBOE Volatility index was down 89 cents at 19.14.

Meanwhile, iHeartMedia, Inc.’s bonds were on the mend on Thursday with its senior and secured paper trading about ½ point to 1 point better.

QVC, Qurate improve

QVC’s 4¾% notes due 2027 (B2/B-) traded about 3 points higher with a 54 bid handle on more than $11 million of volume on Thursday, a source said.

The home shopping network company’s 4 3/8% notes due 2028 (B2/B-) added 3½ points to a quote of 55½ bid on nearly $10 million of trading during the session.

Parent Qurate Retail’s 8½% senior notes due 2029 (Caa2/CCC-) also climbed about 3 points to 37 bid in late afternoon trading on about $3 million of activity.

The 8¼% notes due 2030 (Caa2/CCC-) from the issuer were nearly 2¾ points higher with a 35 bid handle on $2.5 million of trading.

Qurate Retail said Wednesday the Zulily divesture is expected to allow the company to focus on its core video commerce assets, including QVC and HSN.

The West Chester, Pa.-based company, formerly known as Liberty Interactive LLC, said that Zulily will no longer be a co-borrower on QVC’s bank credit facility and it repaid Zulily’s $80 million outstanding debt.

Diebold Nixdorf declines

Diebold Nixdorf’s 8½% senior notes due 2024 (Ca/CC) fell more than 3¾ points to a quote of 4 1/8 bid on Thursday, a source said.

The yield was 1,066%.

Trading was on the light side with $1.33 million of volume.

Diebold Nixdorf announced on May 19 that it has further extended an exchange offer for the 8½% notes to June 5.

However, the company said in the release that it “currently believes that the exchange offer will not be consummated.”

In March, Diebold Nixdorf amended its credit facility to add a new $55 million first-in, last-out term loan tranche due in June, according to a Fitch Ratings report.

The Hudson, Ohio-based financial and retail technology company also conducted a distressed exchange in December.

iHeartMedia higher

iHeartMedia’s 8 3/8% senior notes due 2027 (Caa1/B-) improved more than ½ point in active trading on Thursday, though the notes remained soft on the week, a source said.

The issue was trading at 56¾ bid on more than $8 million of secondary action.

The notes were about ¾ point lower this week.

iHeartMedia’s 5¼% senior secured notes due 2027 (B1/BB-) climbed 1 point to 70¼ bid in lighter secondary action totaling $3.3 million.

The San Antonio-based media broadcasting company’s issue was down 1 point from the prior week.

Distressed returns drop

S&P U.S. High Yield Corporate Distressed Bond index one-day returns slid on Wednesday to minus 0.75% from 0.17% on Tuesday and 0.14% on Monday.

Month-to-date total returns dropped to minus 0.93% from minus 0.18% in Tuesday’s session and minus 0.35% at the week’s start.

Year-to-date total returns fell to 6.33% midweek, compared to 7.13% on Tuesday and 6.95% on Monday.

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