Rite Aid paper declines, CDS spreads gap out; DISH trades lower; Viasat flat; Altice up

By Cristal Cody

Tupelo, Miss., Sept. 28 – Rite Aid Corp. continues to remain volatile amid bankruptcy chatter with its junk paper declining and credit default swap spreads gapping out this week.

The 8% senior secured notes due 2026 (Caa3/CCC-/B) were mostly unchanged in thin trading over the session.

The issue has declined over 3 points this week.

Rite Aid’s CDS spreads moved out more than 11,000 basis points this week to over 42,000 bps.

Tone continued to mostly improve in overall markets with stock indices all higher.

The S&P 500 index closed up 0.59%, while the iShares iBoxx High Yield Corporate Bond ETF added 35 cents, or 0.48%, to $73.83.

The CBOE Volatility index dropped nearly 5% to 17.34.

CDS spreads for cable and satellite operators also widened this week, while bonds in the cable and satellite space remained mostly under pressure in the secondary market.

DISH Network Corp.’s 7¾% senior notes due 2026 (Caa2/B-) dipped about ¼ point over the day with the issue down over 2 points this week.

DISH’s CDS spreads widened over 100 bps this week.

Satellite broadband services provider Viasat Inc.’s 7½% senior notes due 2031 (Caa1/B) went out unchanged a second day at 65 bid, a source said.

Altice France Holding SA’s paper stood out with the bonds seen about ½ point to over 2 points stronger on Thursday.

The 5¾% senior secured notes due 2029 (B3/B) rallied 2 1/8 points from Wednesday.

Rite Aid in distress

Rite Aid’s 8% senior secured notes due 2026 (Caa3/CCC-/B) were quoted mostly flat at 58 bid in light trading totaling under $1 million on Thursday, a source said.

The notes have declined about 3¼ points this week.

Meanwhile, Rite Aid’s CDS spreads widened 11,410 bps over the past week ended Wednesday to 42,762 bps, according to a Moody’s Investors Service report on Thursday.

The company is expected to soon file for Chapter 11 bankruptcy, according to a Wall Street Journal report in the prior week.

The Camp Hill, Pa.-based drugstore chain’s stock (NYSE: RAD) dropped 9.32% on the day to close at 46 cents in light trading.

DISH remains soft

DISH DBS Corp.’s 7¾% senior notes due 2026 (Caa2/B-) dipped about ¼ point to 74½ bid in active secondary trading on Thursday, according to market sources.

The notes declined over 1¾ points on Wednesday and gave back ½ point on Tuesday.

DISH credit spread swaps also weakened among the volatility.

DBS DBS’ CDS spreads widened 126 bps to 1,742 bps for the week ended Wednesday, according to a Moody’s report.

Englewood, Colo.-based satellite cable operator DISH Network’s CDS spreads also eased 106 bps in the same period to 1,463 bps.

Altice notes gain

In one of the day’s gainers, Altice Financing SA’s 5¾% senior secured notes due 2029 (B3/B) climbed to 81 5/8 bid on over $15 million of secondary action on Thursday, a market source said.

The notes rallied 2 1/8 points from Wednesday.

Altice France’s 10½% senior notes due 2027 (Caa2/CCC) also went out about 1¼ points higher with a 61 bid handle in light trading.

Altice USA, Inc.’s stock (NYSE: ATUS) climbed 7.5% on Thursday to $3.45.

Distressed returns soft

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns remained weak at minus 0.35% on Wednesday versus minus 0.5% on Tuesday and minus 0.09% on Monday.

Month-to-date total returns declined to 0.17% midweek from 0.52% on Tuesday and 1.02% at the start of the week.

Year-to-date distressed total returns softened to 17.32% in the prior session from 17.73% on Tuesday and 18.32% on Monday.

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