Level 3 paper jumps in trading that tops $100 million; Lumen, Embarq soften; Coinbase up

By Cristal Cody

Tupelo, Miss., July 11 – Bonds from Lumen Technologies, Inc. subsidiary Level 3 Financing, Inc. saw heavy secondary action during the session with the notes up ¼ point to more than 4 points on trading that topped $100 million.

Level 3 Financing’s 4 5/8% senior notes due 2027 (B1/B/B+) jumped 4 1/8 points on $24 million of volume.

Lumen Technologies’ paper declined more than 1 point in light trading.

Lumen’s 4% senior secured notes due 2027 (B3/BB-/BB) fell 1 5/8 points on under $4 million of volume.

Former Lumen subsidiary Embarq Corp.’s 7.995% senior notes due 2036 (Caa2/CCC/CCC) also slipped nearly ¾ point on $10 million of trading.

Market tone was stronger over the session.

The CBOE Volatility index declined 1.53% to 14.84.

The iShares iBoxx High Yield Corporate Bond ETF gained 40 cents, or 0.54%, to $74.62.

Coinbase Global, Inc.’s 3 3/8% senior notes due 2028 (B1/B) also caught traders’ focus on Tuesday with the bonds rallying about 2 points.

Level 3 bonds jump

Level 3 Financing’s bonds saw heavy trading activity on more than $103 million of paper traded on Wednesday, a source reported.

The issuer’s 4 5/8% senior notes due 2027 (B1/B/B+) jumped 4 1/8 points to 72¾ bid on $24 million of notes changing hands.

Level 3’s 3 7/8% senior secured notes due 2029 (Ba2/BB-/BB) topped the day’s secondary action on $40 million-plus of trading on Tuesday.

The notes went out up 1¾ points at 83 bid.

Level 3’s 3¾% senior notes due 2029 (B1/B/B+) added 2¾ points by the close to a quote of 61½ bid on $8.6 million of secondary supply also.

Parent Lumen Technologies’ paper declined more than 1 point in light trading.

Lumen’s 5 1/8% senior notes due 2026 (Caa1/CCC+/B-) dropped 1½ points to 84¼ bid in thin activity.

Lumen’s 4% senior secured notes due 2027 (B3/BB-/BB) fell 1 5/8 points to 72 bid on $3.7 million of volume.

Lumen plans to post its second-quarter earnings results on Aug. 1.

Shares (NYSE: LUMN) in the Denver-based telecommunications company edged up 1 cent, or 0.49%, to $2.07.

Embarq declines

Embarq’s 7.995% senior notes due 2036 (Caa2/CCC/CCC) traded down nearly ¾ point to 63½ bid going out Tuesday, a source said.

The bonds were one of the session’s most active distressed issues on $10 million of trading.

Embarq was acquired from Lumen Technologies by Connect Holding LLC and a subsidiary doing business as Brightspeed in 2022.

Coinbase up

Coinbase’s 3 3/8% senior notes due 2028 (B1/B) traded nearly 2 points higher on Tuesday at 67¾ bid in active secondary supply, a source said.

Volume totaled $12 million following news reports that CBOE Global Markets had partnered with Coinbase and filed amended applications to list and trade Bitcoin ETFs.

Coinbase’s bonds have gained about 7 points since the Securities and Exchange Commission announced June 6 that it charged the crypto company with operating as an unregistered national securities exchange, broker and clearing agency.

Coinbase’s stock (Nasdaq: COIN) rallied 9.78% on Tuesday in heavy trading to close at $89.15.

Shares had dropped to the low 50s following the SEC complaint filed in the U.S. District Court for the Southern District of New York.

Distressed index soft

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns opened the week higher at 0.15%, compared to 0.12% in the same session a week ago.

Month-to-date total returns for July improved on Monday to 0.07% after going out Friday at minus 0.22%.

Year-to-date distressed total returns rose to 11.55% from 11.38% on Friday but remained soft versus 11.76% of returns in the week-ago session.

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