DISH bonds extend gains; Carvana higher after collapse of exchange offer; Bausch up

By Cristal Cody

Tupelo, Miss., June 2 – DISH Network Corp.’s bonds traded higher on Friday on anticipation the company will strike a deal with Amazon.com Inc., which is reportedly holding discussions with wireless carriers to bring mobile telephone services to Prime customers.

Volatility continued to recede with the debt ceiling bill passing the Senate and expected to be signed by the president over the weekend.

Market tone also remained heady on Friday with stocks up after the strong jobs report, sources reported.

The CBOE Volatility index fell 7% to 14.55.

The Labor Department announced that May total nonfarm payroll employment rose by a seasonally adjusted 339,000, well above the 195,000 market analysts expected.

However, the May unemployment rate increased 0.3% to 3.7%, higher than the 3½% forecast.

The S&P 500 index rose 1.45%. The Dow Jones industrial average climbed 701 points.

The iShares iBoxx High Yield Corporate Bond ETF added 37 cents, or 0.5%, to $74.57.

May saw 10 corporate issuers default on $7.2 billion of bonds, equaling a 7.3% annualized default rate, Oleg Melentyev, a credit strategist at BofA Securities, Inc., said in a report on Friday.

The defaults are starting to “pile up,” he said, noting that “deep distress continues to grow.”

Meanwhile, Carvana Co.’s 5½% notes due 2027 (Ca/C) traded 2¾ points better in fairly light activity after the company reported it terminated its exchange offer for five series of notes because of an unmet minimum.

Carvana’s issue had just $2 million of trading on Friday.

Bausch Health Cos. Inc.’s paper saw modest gains over the session.

Bausch 11% senior secured notes due 2028 (Caa1/CCC+/B) were ¼ point better by the afternoon.

DISH picks up steam

DISH DBS Corp.’s 7¾% senior notes due 2026 (B3/B-) improved more than 2¾ points to the 61½ bid area on $5.7 million of volume on Friday, a source said.

The notes were quoted going out Thursday up more than 1½ points on $10.5 million of secondary supply.

DISH’s 5 1/8% senior notes due 2029 (B3/B-) picked up 4¾ points to trade Friday with a 51 bid handle on $2.6 million of volume.

The 7 3/8% senior notes due 2028 (B3/B-) also climbed over 5 points to a 57 bid handle on $1.5 million of trading.

Credit default swap spreads from both DISH DBS and DISH Network tightened more than 250 basis points this week.

The Englewood, Colo.-based satellite cable operator’s stock (Nasdaq: DISH) closed Friday up 16.24% at $7.30.

Carvana improves

Carvana’s 5½% senior notes due 2027 (Ca/C) traded 2¾ points better at 64¼ bid on $2 million of secondary activity on Friday, a source reported.

The issue was one of five tranches of notes that Carvana sought to exchange.

Carvana reported Friday in a regulatory filing that it terminated its exchange offer for five series of notes after the minimum participation condition of $500 million of tendered notes was not met.

The Tempe, Ariz.-based online car retailer first announced on March 22 the exchange offer for five tranches of notes for up to $1 billion of new 9%/12% cash/PIK toggle senior secured second-lien notes due 2028.

The offer expired on Thursday.

Carvana’s stock (NYSE: CVNA) was down 12 cents, or 0.76%, on the day at $15.68.

Bausch edges higher

Bausch’s 11% senior secured notes due 2028 (Caa1/CCC+/B) traded ¼ point better by the afternoon to 75 bid on about $6 million of volume, a source said.

Bausch Health Americas, Inc.’s 8½% senior secured notes due 2027 (Caa1/CCC+/B) also were ½ point higher at 54¾ bid during the session.

The Laval, Quebec-based pharmaceutical company’s stock closed up 3 cents, or 0.37%, at $8.23 in light trading.

June returns up at start

S&P U.S. High Yield Corporate Distressed Bond index one-day returns in the first session of June were 0.26%, up from minus 0.55% on Wednesday.

Quarterly returns totaled 2.3% on Thursday.

Year-to-date total returns improved on Thursday to 6.92% from 6.64% on Wednesday but remained down from 7.23% at the week’s start.

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