DISH notes slide in wide sell-off; Bausch Health declines; iHeartCommmunications drops

By Cristal Cody

Tupelo, Miss., Oct. 3 – DISH Network Corp.’s bonds were the talk of the day in the junk and distressed markets on Tuesday as the bonds slid in heavy trading following the announcement of the first U.S. government fine over space debris.

The company’s notes dropped about 2 points or more by the close.

DISH’s 7¾% senior notes due 2026 (Caa2/B-) slid nearly 4 points on more than $31 million of bonds traded.

The issue was at the top of the stack of the most traded distressed bonds and saw the heaviest losses over the session, a source said.

Bausch Health Cos. Inc.’s paper traded down about 1 point or more also in some of the day’s most active distressed issues with more than $38 million of bonds changing hands after a downgrade from Fitch Ratings.

The company’s 11% senior secured first-lien notes due 2028 (Caa1/CCC+/B) fell about 1 point.

Bonds softened widely across sectors in the distressed space on Tuesday as stocks tanked and Treasury yields hit their highest levels in decades, according to market sources.

iHeartCommunications, Inc.’s 8 3/8% senior notes due 2027 (Caa1/CCC+) dropped nearly 2½ points.

Volatility soared to its highest level in months after a surprising jobs report but pulled back slightly late in the session. The CBOE Volatility index climbed 13.69% before finishing up 12.32% at 19.78.

Stock indices all slid more than 1%. The S&P 500 index closed down 1.37%.

The iShares iBoxx High Yield Corporate Bond ETF dropped 74 cents, or 1.02%, to $72.15.

Treasury yields were sitting at their highest levels since the 2007 financial crisis.

The benchmark 10-year Treasury note yield jumped around 12 basis points to 4.8%.

The Labor Department reported on Tuesday in its Job Opening and Labor Turnover Survey that 9.6 million jobs were open at the end of August, up from 8.83 million of job openings in July.

“The August JOLTS data showed a surprising 690k increase in job openings, concentrated in the professional and business services sector,” according to a BNP Paribas Securities note on Tuesday. “As a result, the openings-to-unemployed ratio – a key Fed metric of job-market imbalance – shows less-clear progress than expected in aligning demand to supply. The ratio held at 1.5 in August, still above pre-pandemic levels.”

DISH bonds slip

DISH DBS Corp.’s 7¾% senior notes due 2026 (Caa2/B-) were down more than 3¾ points on Tuesday on a 69 bid handle and yielding over 23%, a source said.

Secondary action was heavy with more than $31 million of notes traded a day after the FCC announced its first space debris enforcement action was taken against DISH.

DISH’s 5 1/8% senior notes due 2029 (Caa2/B-) dropped 3½ points during the session but went out down around 3 points at 51½ bid on $13 million of volume. The yield was 19.725%.

The FCC announced on Monday a settlement with DISH that includes a penalty of $150,000 and an admission of liability for failure to properly deorbit its EchoStar-7 satellite.

DISH’s 7 3/8% senior notes due 2028 (Caa2/B-) also declined 2 points to 59½ bid by the time the dust settled Tuesday. Trading volume was at $4.8 million.

The Englewood, Colo.-based satellite cable operator’s stock closed down 7.87% at $5.15.

Bausch moves lower

Bausch Health Americas, Inc.’s 11% senior secured first-lien notes due 2028 (Caa1/CCC+/B) were among the most traded distressed issues on Tuesday on $14 million-plus of secondary activity, a source said.

The notes fell about 1 point to around 65½ bid.

Bausch’s 4 7/8% senior secured notes due 2028 (Caa1/CCC+/B) declined nearly 1½ points to 54¼ bid on $10.7 million of volume on Tuesday.

The 6 1/8% senior secured notes due 2027 (Caa1/CCC+/B) also were quoted trading on a 59 handle on $10.7 million of activity.

Bausch Health Cos.’ 6¼% senior notes due 2029 (Ca/CCC-/C) went out 1½ points softer at 37 bid on $4.4 million of trading.

The company’s distressed bonds were yielding around 20.6% on the 2028 notes to over 31% on the 2029 tranche on Tuesday.

Bausch is facing a securities class action lawsuit over alleged violations of federal securities laws as well as investor contention against its plans to spin off Bausch + Lomb Corp.

Fitch said Tuesday it downgraded Bausch and its second-lien and unsecured debt on growing refinancing risk based on factors including if the company completes the spinoff.

The Laval, Quebec-based pharmaceutical company’s common stock (NYSE: BHC) was down 1.6% on the day at $8.01 in light trading.

iHeart notes down

iHeartCommunications’ 8 3/8% senior notes due 2027 (Caa1/CCC+) dropped nearly 2½ points to go out Tuesday at around 68 bid, a source said.

Secondary supply totaled $7.1 million.

The bonds were last seen in mid-September on a 74 bid handle.

Shares in San Antonio-based media broadcasting company iHeartMedia, Inc. (Nasdaq: IHRT) closed off 2.33% at $2.94.

Distressed index drops

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns slid over the first session of October.

Returns dropped to minus 0.73% on Monday from 0.51% on Friday and minus 0.09% in the same session a week ago.

Month-to-date total returns for October sit at minus 0.73% after the index finished Friday and September at 0.55%.

Year-to-date distressed total returns declined to 16.91% on Monday versus 17.77% ahead of the weekend and 18.32% in the same session a week earlier.

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