CommScope paper slides on quarterly losses; Ardagh moves down; Rite Aid edges higher

By Cristal Cody

Tupelo, Miss., Oct. 30 – CommScope Holding Co., Inc.’s paper plunged in secondary trading that topped the junk and distressed markets on Monday after the company reported preliminary third-quarter results.

While some of CommScope’s paper has traded recently in the distressed secondary market, the issuer’s 6% notes due 2025 (Caa1/CCC+) had been nowhere near the space until Monday, a source said.

The notes sank 15¼ points on nearly $72 million of secondary action, putting the paper with a low 70s handle.

CommScope’s 8¼% senior notes due 2027 (Caa1/CCC+) dropped 8 points on Monday to head out with a handle in the low 50s.

The company’s common stock sank 39% by the close.

Ardagh Group SA’s 6½% senior secured notes due 2027 (Caa3/B-) continued to move lower after dropping over 6 points on Friday. The notes were down 1 3/8 points as the week kicked off.

Overall market tone was mostly better with stock indices up and volatility lower ahead of the Federal Reserve’s rate decision due Wednesday and the October jobs report due Friday.

The S&P 500 index closed up 1.2%, while the iShares iBoxx High Yield Corporate Bond ETF rose 2 cents, or 0.03%, to $72.38.

The CBOE Volatility index fell 7.15% to 19.75.

Other distressed names were up on Monday.

Bankrupt Rite Aid Corp.’s 8% senior secured notes due 2026 rose 1/8 point on $5 million of trading.

CommScope pressured

CommScope Technologies LLC’s 6% senior notes due 2025 (Caa1/CCC+) plunged 15¼ points by the close on Monday to a quote of 74 bid and a 26.76% yield in heavy trading totaling $71.8 million, a source said.

CommScope, Inc.’s 6% senior secured notes due 2026 (B1/B) dropped 5 1/8 points to 83 3/8 bid and a 14.6% yield on $25.9 million of volume.

The company’s 4¾% senior secured notes due 2029 (B1/B) gave back over 2 points to trade at 66¼ bid and a 13.2% yield on $16.75 million of trading.

CommScope’s 8¼% senior notes due 2027 (Caa1/CCC+) sank 8 points on Monday to head out at 53 bid and a 32.2% yield on $14 million of secondary activity.

The issue was quoted in the same session a week ago at 62 bid.

Other CommScope notes were down over 5 points. The 7 1/8% senior notes due 2028 (Caa1/CCC+) fell 5½ points to just under 46 bid and a 28.89% yield on $3.3 million of trading.

CommScope Holding reported on Monday it expects a preliminary third-quarter GAAP net loss of $829 million. The company also said that based on lower-than-anticipated third-quarter results, it revised its core adjusted EBITDA forecast for 2023 down to $1 billion to $1.05 billion.

CommScope plans a Nov. 9 conference call to discuss the third quarter.

The Hickory, N.C.-based network infrastructure manufacturer’s shares (Nasdaq: COMM) dove 38.84% by the close to end at $1.48.

Ardagh declines

Ardagh Finance SA’s 6½% senior secured notes due 2027 (Caa3/B-) traded down 1 3/8 points to 58 1/8 bid on Monday, a source said.

The yield was 24.419%.

Volume hit $7 million in the issue over the session.

The bonds were quoted Friday down 6¼ points on more than $12 million of trading after declining 4¾ points in the prior session.

Luxembourg-based metal and glass packaging company Ardagh Group announced weaker results in its earnings report on Thursday.

Rite Aid edges up

In one of the day’s gainers, Rite Aid’s 8% senior secured notes due 2026 (/D/CC) rose 1/8 point to 71¾ bid on $5 million of secondary action on Monday, a source said.

Rite Aid’s notes traded about 2 points better in the prior week in heavy secondary supply.

The Philadelphia-based retailer’s notes have climbed from where they traded at 65½ bid, 66½ offered before the company reported Oct. 16 that it filed for Chapter 11 bankruptcy.

Distressed index soft

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns ended Friday at minus 0.22%, compared to minus 0.72% on Thursday, minus 0.34% on Wednesday, 0.32% on Tuesday and 0.1% at the start of the prior week.

Month-to-date total returns softened to minus 4.93% on Friday from minus 4.72% on Thursday and minus 4.01% at the week’s start.

Year-to-date distressed total returns fell to 11.97% versus 12.22% in the prior session and 13.05% in the first session of the week.

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