Bausch Health bonds swing higher; Rite Aid skids after regulatory filing; DISH slips

By Cristal Cody

Tupelo, Miss., July 12 – A handful of distressed bonds yielding more than 20% were on the move on Wednesday, including from Bausch Health Americas, Inc.

Bausch Health Cos. Inc.’s 6¼% senior notes due 2029 (Ca/CCC-/CC) jumped 4½ points by the day’s end.

Meanwhile, Rite Aid Corp.’s 7½% senior secured notes due 2025 (Caa3/CCC-/B) sank 9 points on Wednesday in active trading a day after the company posted its 10-Q filing with the Securities and Exchange Commission.

The issue was yielding nearly 53%.

Stocks headed higher with the Nasdaq closing up 1.15% following June U.S. inflation data coming in below forecasts.

The Labor Department reported the Consumer Price Index in June rose 3% year over year, below analysts’ projections of 3.1% for the month and below the 4% increase in May.

Volatility pulled back nearly 10% over the day. The CBOE Volatility index dropped 8.76% to 13.54.

The iShares iBoxx High Yield Corporate Bond ETF rose 58 cents, or 0.78%, to $75.20.

DISH Network Corp.’s 7¾% senior notes due 2026 (B3/B-) fell ½ point in one of the session’s active distressed issues yielding more than 27%.

Distressed names were among the most active junk issues seen trading higher early Wednesday before pulling back slightly over the afternoon, according to a market source.

Over the morning, Level 3 Financing, Inc.’s 4¼% senior notes due 2028 (B1/B) rallied 1¼ points to 68½ bid and by the afternoon were trading up 1 point at 68¼ bid, the source said.

Bausch Health gains

Bausch Health’s 6¼% senior notes due 2029 (Ca/CCC-/CC) shot up 4½ points to a quote of 48½ bid and yielding just over 23% on Wednesday, a source said.

The bonds saw fairly active trading on $7 million of volume.

The notes went out in the prior week at 43 bid.

Bausch Health’s 6 1/8% senior secured notes due 2027 (Caa1/CCC+/B) added 1 point to trade at 68¾ bid and a 20% yield on $7 million of paper changing hands during the session.

The notes were trading nearly 5 points better on the week.

Bausch Health’s 11% notes due 2028 (Caa1/CCC+/B) also gained 1 point by the close to go out at 73½ bid on $6 million of trading. The bonds were yielding 19.26%.

The company’s paper has been on the upswing since Bausch Health announced on Friday that a subsidiary entered into a $600 million five-year revolving credit facility with investment firm KKR, in addition to subsidiary Bausch + Lomb Corp.’s second acquisition announcement in the prior week.

The Laval, Quebec-based pharmaceutical company’s common shares (NYSE: BHC) fell 1.62% to $8.51.

Rite Aid slides

Rite Aid’s 7½% senior secured notes due 2025 (Caa3/CCC-/B) sank 9 points by the close with the issue going out at 48¼ bid and a 52.9% yield, a source reported.

Trading totaled $6 million in the issue.

The bonds traded with a 65 bid handle at the end of June.

Rite Aid’s 8% senior secured notes due 2026 (Caa3/CCC-/B) were down 1¾ points on the day at 40½ bid and a 43.35% yield. Trading topped out at $7.75 million.

The secured notes have declined about 8 points since June.

Rite Aid released its 10-Q filing on Tuesday and gave additional details following its June first-quarter report.

Rite Aid had reported heavy fiscal 2024 first-quarter losses and reduced its adjusted EBITDA guidance for fiscal 2024 and projected a fiscal year net loss of $650 million to $680 million.

Rite Aid also is reportedly looking at closing some store locations.

In the 10-Q, Rite Aid reported that it closed 27 stores in the last quarter.

Rite Aid had 2,284 stores by the end of the quarter on June 3, down from 2,309 stores it reported at the beginning of the quarter.

In the same quarter last year, Rite Aid closed 89 stores.

The Camp Hill, Pa.-based drugstore chain’s stock (NYSE: RAD) closed off 1.23% at $1.61.

DISH softens

DISH DBS Corp.’s 7¾% senior notes due 2026 (B3/B-) softened about ½ point on Wednesday to 62¼ bid on $6 million of trading, a source said.

The issue has softened about ¾ point this week.

On Monday, the bonds declined ½ point to a quote of 62½ bid on $6.2 million of activity.

DISH’s higher-rated Ba3/B junk bonds were trading about ½ point better on Wednesday in stronger trading action, the market source said.

The Englewood, Colo.-based satellite cable operator’s stock (Nasdaq: DISH) edged down 0.28% to $7.23.

Distressed returns up

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns improved to 0.55% on Tuesday from 0.15% on Monday.

Month-to-date total returns also rose to 0.48% in the prior session from 0.07% at the start of the week.

Year-to-date distressed total returns climbed to 12.17% on Tuesday from 11.55% in Monday’s session.

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