Community Health notes up; Bausch Health mixed; QVC down; Michaels dips; Staples better

By Cristal Cody

Tupelo, Miss., July 3 – Bond market action stayed light over the short session on Monday with a handful of distressed names seen active ahead of Tuesday's Fourth of July holiday in the United States.

Community Health Systems Inc.’s 6 1/8% secured notes due 2030 (Caa2/CCC-) were among the day’s gainers with the issue up ¾ point.

Bausch Health Cos. Inc.’s 8½% senior secured notes due 2027 (Caa1/CCC+/B) shifted ½ point lower, while other Bausch bonds traded more than 1 point higher in thin volume following a new acquisition announcement.

Michaels Cos, Inc.’s 7 7/8% senior notes due 2029 (Caa2/CCC) came under pressure over the session with the bonds down 1 point.

QVC Inc.’s notes mostly traded about ¾ point to 1 point lower in light trading totaling $2 million.

Overall junk and distressed trading volume stayed light in front of the early market close on Monday and the Independence Day holiday on Tuesday, a source reported.

Staples Inc.’s 10¾% senior notes due 2027 (Caa2/CCC+) saw some of the day’s heaviest distressed trading with $2 million of notes changing hands.

The bonds were up ½ point after going out Friday unchanged.

Monday ended on a positive tone with stock indices all higher.

The S&P 500 index edged up 0.12%.

Market volatility decreased by the close.

The CBOE Volatility index fell 0.15% to 13.57.

The iShares iBoxx High Yield Corporate Bond ETF declined 12 cents, or 0.16%, to $74.55.

Community Health improves

Community Health’s 6 1/8% secured notes due 2030 (Caa2/CCC-) picked up ¾ point to a quote of 61 bid by the early close on Monday, a market source said.

Trading was thin at under $1 million.

The issue gained more than 1 point in the prior week.

Shares (Nasdaq: CYH) in the Franklin, Tenn.-based operator of acute care and outpatient facilities finished up 2.27% at $4.50 in light trading.

Bausch mixed

Bausch Health Americas, Inc.’s 8½% senior secured notes due 2027 (Caa1/CCC+/B) fell ½ point on Monday to 55¼ bid, a market source said.

Bausch’s bonds went out Friday mostly higher.

The issuer’s 11% notes due 2028 (Caa1) traded over 1 point higher on Monday at 72 3/8 bid in small lots.

Bausch subsidiary Bausch + Lomb Corp. reported Friday that it entered into a definitive agreement with Novartis to acquire a non-steroid eye drop and other applications for up to $2.5 billion, including an upfront payment of $1.75 billion in cash.

Bausch + Lomb said it intends to finance the upfront cash with new debt prior to closing, which is expected by the end of 2023.

The Laval, Quebec-based pharmaceutical company’s stock (NYSE: BHC) dropped 2¼% on less-than-average trading volume on Monday to close at $7.82.

Michaels notes down

Michaels’ 7 7/8% senior notes due 2029 (Caa2/CCC) softened 1 point over the day to 67¾ bid, a market source said.

The bonds rallied about 2 points to 2¼ points in the prior week.

The Irving, Tex.-based arts and crafts retailer was taken private in 2021 by funds managed by Apollo Global Management, Inc. affiliates.

QVC lower

QVC’s 4¾% notes due 2027 (B2/B-) dropped ¾ point to 63¾ bid on $1 million of trading activity over the short session, a source said.

The company’s 4.45% notes due 2025 (B2/B-) also slipped about 1 point to 87½ bid on $1 million of volume.

Parent Qurate Retail Inc.’s stock (Nasdaq: QRTEA) rallied 12.14% on Monday to finish at $1.11.

The West Chester, Pa.-based company reported in May that it divested a subsidiary and will focus on its core video commerce assets, including QVC and HSN.

Staples better

Staples’ 10¾% senior notes due 2027 (Caa2/CCC+) rose ½ point by the close to a quote of 58 7/8 bid on $2 million of trading action, a source said.

The notes went out flat on Friday at 58 3/8 bid in one of the day’s more active distressed issues on $6.8 million of activity.

Staples is a Framingham, Mass.-based office products retail company owned by private equity firm Sycamore Partners.

June index returns up

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns rose to 0.46% on Friday, compared to 0.06% on Thursday, 0.36% on Wednesday, 0.24% on Tuesday and minus 0.17% at the prior week’s start.

June ended with total returns of 4.67% on Friday, up from 4.2% on Thursday, 4.13% on Wednesday, 3.76% on Tuesday and 3.51% in the prior week’s first session.

Month-to-date total returns for June improved from May total returns of minus 0.63%.

January finished with 7.99% of distressed index returns, while February returns were 1.03%, March month-to-date returns were minus 4.2% and April bond index returns were 2.68%.

Year-to-date distressed total returns rose Friday to 11.63% versus 11.12% on Thursday, 11.05% on Wednesday, 10.66% on Tuesday and 10.39% at the prior week’s start.

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