Rite Aid secondary trading slows, paper higher on week; CommScope notes drop; AMC lower

By Cristal Cody

Tupelo, Miss., Oct. 20 – Secondary trading slowed on Friday in Rite Aid Corp.’s 8% senior secured notes due 2026 (/D/CC) with the paper giving back some gains.

The bonds had racked up heavy secondary numbers after the company reported Monday it filed for Chapter 11 bankruptcy, including $20.5 million of paper traded on Thursday and $28.9 million of volume on Wednesday.

On Friday, the issue saw $5 million of trading volume and was moving about 1½ points lower.

Rite Aid’s paper was still stronger on the week and was going out nearly 5 points better.

Secondary trading overall was lighter on Friday with distressed names seen mostly lower, a source said.

CommScope Holding Co., Inc.’s paper declined more than 1 point.

The 8¼% senior notes due 2027 (Caa1/CCC+) slipped 1¾ points in one of the session’s more active names.

Also Friday, AMC Entertainment Holdings, Inc.’s bonds softened.

The 10% senior secured second-lien notes due 2026 (Caa3/CCC-) fell ¾ point over the day and were about 2 points lower on the week.

Market tone slid on Friday as stocks sold off and Treasury yields pulled back. The S&P 500 index closed down 1.26%.

The benchmark 10-year Treasury note yield was nearing its highest level since 2006 after climbing 8 basis points Thursday but fell 6 bps on Friday to 4.92%.

The iShares iBoxx High Yield Corporate Bond ETF added 15 cents, or 0.21%, to $71.93.

The CBOE Volatility index was up 1.4% at 21.71.

Meanwhile, the global corporate default total hit 118 this year following 11 defaults in September, according to a report on Friday from S&P Global Ratings.

The tally is nearly twice as much as the 2022 total and marginally above its five-year average of 101, S&P said.

Defaults have been driven by distressed debt exchanges in an appeal over traditional bankruptcy with 52 so far in 2023 following six additions in September, according to the note.

The total is the “highest year-to-date count of distressed exchanges since 2009,” S&P said.

Rite Aid softens

Rite Aid’s 8% senior secured notes due 2026 (/D/CC) traded down nearly 1½ points to 69½ bid on $5 million of volume Friday afternoon, a source said.

The bonds were still better on the week.

The issue was quoted in the same session last week at 64¾ bid.

Rite Aid’s 7½% senior secured notes due 2025 (/D/CC) also fell 2 points to 69½ bid on $2 million of trading on Friday.

The Philadelphia-based retailer’s credit default swap spreads came in more than 33,000 bps this week after the bankruptcy filing.

CommScope drops

CommScope, Inc.’s 8¼% senior notes due 2027 (Caa1/CCC+) traded 1¾ points lower on Friday at 62½ bid, a source said.

The issue was among the most active names moving over the afternoon on nearly $7 million of activity.

CommScope’s 4¾% notes due 2029 (B1/B) also were down 1 point at 70¼ bid in light trading totaling $1.5 million during the session.

The Hickory, N.C.-based network infrastructure manufacturer’s shares (Nasdaq: COMM) closed up 1.29% to $2.36 in light trading.

AMC notes decline

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) traded off ¾ point on Friday to 77 bid, a source said.

Trading was active on $4 million of volume in otherwise light market action.

The issue was about 2 points lower on the week.

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) also softened on Friday to 70 3/8 bid on $3 million of notes traded.

The bonds were down 3/8 point on the day and over 2 points softer on the week.

The Leawood, Kan.-based movie theater owner’s stock (NYSE: AMC) fell 3% to end at $9.08 in light activity.

Distressed index down

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns improved to minus 0.14% on Thursday, compared to minus 0.37% on Wednesday, minus 1¼% on Tuesday and minus 0.17% on Monday.

Month-to-date total returns softened to minus 3.39% on Thursday from minus 3.25% on Wednesday, minus 2.89% on Tuesday and minus 1.66% in Monday’s session.

Year-to-date distressed total returns softened to 13.78% in the prior session from 13.94% on Wednesday, 14.36% on Tuesday and 15.81% at the start of the week.

© 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.