CommScope pulls back from gains; QVC, Qurate Retail notes rally; Level 3, Lumen soft

By Cristal Cody

Tupelo, Miss., Nov. 3 – CommScope Holding Co., Inc.’s notes eased off the gas on Friday after Thursday’s climb with some of the paper trading down less than 1 point and going out more than 10 points lower on the week.

CommScope’s 6% senior notes due 2025 (Caa1/CCC+) slipped ¾ point.

The company’s bonds had rallied 4½ points to over 9 points on more than $60 million of volume on Thursday in a bid to recover some of the losses from Monday and Tuesday.

The 6% notes opened Monday with a handle in the 80s.

Distressed secondary supply was strong on Friday on more than $421 million of volume headed into the close.

The market was busy on Friday from the junk and high-grade primary markets to the secondary space, sources reported.

“Everything is up,” a trader said, attributing the stronger tone on the expectation the Federal Reserve is not going to increase rates. “They’re going to stay where they are, but then rates have to begin to come down at some point.”

Bonds from QVC Inc. and parent Qurate Retail Inc. rallied early Friday and into the close.

Qurate Retail’s 8½% senior notes due 2029 (Caa2/CCC-) jumped nearly 5 points higher.

QVC’s 4¾% senior secured notes due 2027 (B2/B-) climbed more than 7 points.

Stock indices closed up again on Friday with rates currently in check and Treasury yields sliding following a weak jobs report.

The S&P 500 index rose 0.94%.

The iShares iBoxx High Yield Corporate Bond ETF picked up 72 cents, or 0.98%, to $74.41.

The CBOE Volatility index moved down 4.79% to 14.91.

The Labor Department said the non-farm payroll added 150,000 jobs in October, short of the 180,000 forecasted.

The unemployment rate rose to 3.9%, higher than the 3.8% analysts expected.

The Fed left the policy rate steady at 5¼% to 5½% on Wednesday.

“Whether the Federal Open Market Committee is done with rate hikes will depend on a few factors – namely, progress on lowering inflation, and the state of labor market and financial conditions,” according to a new S&P Global Ratings report. “For now, we maintain our previous assumption that there will be one more rate hike of 25 basis points in December.”

Level 3 Financing, Inc.’s paper moved lower on Friday before going out flat on the day.

The bonds were down about 10 points on the week.

Parent Lumen Technologies, Inc.’s 4% senior secured notes due 2027 (Caa2/B/B-) declined 1 point during the session.

CommScope pulls back

CommScope, Inc.’s 8¼% senior notes due 2027 (Caa1/CCC+) were trading off ¾ point at 44¼ bid on Friday after picking up more than 9 points in the prior session, a source said.

The bonds remained soft on the week even after recovering over 9 points on Thursday to a quote of 48¼ bid.

The senior notes traded at 61 bid, 62 offered in the same session a week ago.

CommScope Technologies LLC’s 6% senior notes due 2025 (Caa1/CCC+) slipped ¾ point to 71¾ bid on $9.57 million of trading on Friday.

The bonds rose over 5 points on Thursday to just under 73 bid.

The issue opened Monday at 85 bid, 87 offered.

CommScope’s 6% senior secured notes due 2026 (B1/B) fell 3/8 point to 84 3/8 bid on $21.19 million of volume also Friday.

CommScope Holding reported on Monday that it expects preliminary third-quarter losses and adjusted its 2023 EBITDA forecast downward.

S&P placed the Hickory, N.C.-based network infrastructure manufacturer on CreditWatch negative.

Qurate, QVC paper climbs

Qurate Retail’s 8½% senior notes due 2029 (Caa2/CCC-) were seen at 33 bid by midday from 28½ bid on Thursday, a source said.

Qurate Retail's 8¼% senior notes due 2030 (Caa2/CCC-) picked up 3 points to hit 31 bid on $1.3 million of volume, another source reported.

In stronger trading, QVC’s 4¾% senior secured notes due 2027 (B2/B-) climbed nearly 7¼ points to 66¼ bid on $8.54 million of volume near the close Friday.

The issue had climbed just under 7 points earlier in the session to 66 bid on $5.5 million of activity.

QVC’s 4.45% senior secured notes due 2025 (B2/B-) rallied over 5¾ points to a 93 bid handle on Friday in strong trading that totaled $12.72 million.

Earlier in the afternoon, the notes were quoted 5½ points higher at 93 bid on $11.7 million of volume.

The more distressed 4 3/8% senior secured notes due 2028 (B2/B-) traded at just under 60 bid on Friday on $8.96 million of activity.

Credit default swap spreads for Qurate Retail, a West Chester, Pa.-based home shopping network owner formerly known as Liberty Interactive LLC, softened 79 bps over the past week ended Wednesday, according to a Moody’s Investors Service note.

Level 3 flat, Lumen soft

Level 3’s 4¼% senior notes due 2028 (B3/CCC+/CCC+) headed out flat at 48 bid on $8.3 million of trading on Friday, a source said.

The bonds were ending the week about 10 points lower.

Level 3’s 4 5/8% senior notes due 2027 (B3/CCC+/CCC+) also went out unchanged from Thursday at 59 bid on $8.6 million of trading near the close Friday.

The bonds were down 1 point at 58 bid earlier in the session on $6.6 million of volume.

The bonds fell 3 points to 58 bid in the prior session.

Lumen’s paper also remained weak on Friday. The 4% senior secured notes due 2027 (Caa2/B/B-) declined 1 point to a quote of 57 bid on $7 million of volume.

The Denver-based telecommunications company reported third-quarter losses on Tuesday along with plans to conduct a debt exchange after reaching an agreement with creditors holding about $7 billion of its debt.

Distressed index up

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns improved on Thursday to 1.25% after ending the first session of the month at minus 1.26%.

One-day returns were minus 0.82% on Tuesday and minus 0.49% on Monday.

Month-to-date total returns improved on Thursday to minus 0.03%.

Year-to-date distressed total returns rose to 10.47% the previous day from 9.11% on Wednesday, 10.5% on Tuesday and 11.42% on Monday.

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