WeWork distressed notes silent after downgrade; Lumen Tech higher; Bausch Health mixed

By Cristal Cody

Tupelo, Miss., Aug. 16 – WeWork Inc.’s notes stayed mum in the distressed secondary market on Wednesday on the heels of downgrades from Fitch Ratings and S&P Global Ratings.

The distressed office share company’s stock fell more than 21% by the close.

In the same session a week ago, WeWork’s bonds dove to the single digits after the company reported doubts about its ability to continue as a going concern.

General market tone stayed underwater for a second session in a wide equity sell-off.

The Nasdaq, down 1.14% on Tuesday, fell 1.15% on Wednesday.

The iShares iBoxx High Yield Corporate Bond ETF dropped 23 cents, 0.31%, to $74.35.

The CBOE Volatility index, up 11.07% in the prior session, added 1.94% on Wednesday to 16.78.

Lumen Technologies, Inc.’s 4% senior secured notes due 2027 (B3/BB-/BB) picked up 1 point in one of the more active names on about $8.5 million of trading supply.

Bausch Health Americas, Inc.’s notes were mixed by the day’s wrap.

The 4 7/8% senior secured notes due 2028 (Caa1/CCC+/B) rose 1/8 point in the company’s most active issue on $6.95 million of paper traded.

Fitch said Tuesday that Bausch is among its top market concern bonds with the issuer’s debt of $12.7 billion dominating the health care sector. If Bausch files for a Chapter 11 bankruptcy, it would raise the health care space’s default rate to 15% from 4%, Fitch said.

WeWork quiet

Secondary activity came to a stall in WeWork’s paper on Wednesday, a source said.

The bonds have been thinly traded this week but bounced back from trading under 10 bid in the prior week.

In the same session a week ago, the 7 7/8% senior notes due 2025 (/CCC-/C) were quoted at 6 bid, 8 offered.

The 7 7/8% notes were last seen active on Friday at 20 bid.

The bonds traded at 31 bid, 33 offered on Aug. 8 before the company’s second-quarter earnings announcement.

On Wednesday, Fitch said it downgraded WeWork to CC from CCC- on the weaker-than-expected second-quarter results and the company’s going-concern warning.

S&P said Monday it dropped the company’s rating to CCC from CCC+ and the senior notes to CCC- from CCC.

The New York-based office share company’s stock (NYSE: WE) closed down 21.94% to 15 cents in heavy volume totaling over 94 million shares.

Lumen improves

Lumen Technologies’ 4% senior secured notes due 2027 (B3/BB-/BB) were up 1 point at 70 1/8 bid on $8.5 million of trading on Wednesday, a source said.

The 4½% notes due 2029 (Caa1/CCC+) went out at 36 5/8 bid on $2 million of secondary activity.

Lumen reported heavy second-quarter losses of $8.74 billion at the start of the month.

The Denver-based telecommunications company’s stock (NYSE: LUMN) finished up 1.77% at $1.72 in light activity.

Bausch bonds mixed

Bausch Health Cos. Inc.’s 4 7/8% senior secured notes due 2028 (Caa1/CCC+/B) were the company’s most active bond on $6.95 million of paper traded on Wednesday, a source said.

The issue was up 1/8 point at 58½ bid.

Bauch’s 5¾% senior secured notes due 2030 (Caa3/CCC-/B) went out flat at 62 bid on $5 million of volume.

Bausch’s notes gave back about ¼ point to ½ point on Tuesday after adding about 1 point to more than 5 points on Monday.

The company is facing a securities class action lawsuit over alleged violations of federal securities laws, including omissions and fraudulent misrepresentations regarding the company’s business, operations and prospects.

The Laval, Quebec-based pharmaceutical company’s common stock (NYSE: BHC) edged up 0.36% to $8.35 in average trading volume.

Distressed returns down

The S&P U.S. High Yield Corporate Distressed Bond index one-day total returns softened to minus 0.05% on Tuesday from 0.41% on Monday.

Month-to-date total returns dipped to 1.98% in the prior session from 2.04% at the start of the week.

Year-to-date distressed total returns declined to 17.21% on Tuesday from 17.28% on Monday.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.