U.S. Acute Care paper declines; Community Health notes jump; Enviva bonds extend losses

By Cristal Cody

Tupelo, Miss., Nov. 17 – A health care issuer found itself in the cross-hairs in the secondary market on Friday in heavy trading.

U.S. Acute Care Solutions LLC’s 6 3/8% senior secured notes due 2026 (B3/B-) dropped 3½ points on $12 million of notes changing hands.

Other distressed health care paper was stronger on Friday.

Community Health Systems Inc.’s 6 7/8% senior secured notes due 2029 (Caa2/CCC-) were one of the day’s bright spots in the distressed secondary market, according to a source.

The bonds rallied nearly 5 points on the day and have climbed more than 7 points since late October.

In October, the health care space led global defaults, while oil and gas recorded its first default of 2023, according to a S&P Global Ratings note.

The global corporate default tally rose by nine to 127 as of Oct. 31 and is now 13% higher than the five-year average, S&P said.

Elsewhere, Enviva Partners, LP’s 6½% senior notes due 2026 (Caa2/CC/CC) shed another 2 points on Friday but trading activity slowed considerably from the double-digit volume seen Thursday and over the week. Trading topped $1 million over the day.

The junk space was slightly stronger on Friday.

The iShares iBoxx High Yield Corporate Bond ETF rose 17 cents, or 0.23%, to $74.77, while the S&P 500 index improved 0.13%.

The CBOE Volatility index receded 3.63% to 13.80.

U.S. Acute Care drops

U.S. Acute Care Solutions’ 6 3/8% senior secured notes due 2026 (B3/B-) dropped 3½ points on $12 million of notes traded on Friday, a source said.

The bonds went out at 75½ bid and a 20.32% yield.

U.S. Acute Care Solutions is a physician-owned acute care practice based in Canton, Ohio.

Community Health higher

Community Health’s 6 7/8% senior secured notes due 2029 (Caa2/CCC-) climbed 4 5/8 points to 54 1/8 bid going out the door Friday, a source said.

Trading was healthy in the distressed space on $5 million of paper turning over.

The bonds have climbed more than 7 points since late October when the issue was quoted with a 47 bid handle.

Community Health’s 6 1/8% secured notes due 2030 (Caa2/CCC-) added 1¾ points over the session to head out at 49½ bid in lighter trading totaling $1 million.

The issue has picked up more than 5 points from nearly a month ago.

Shares (Nasdaq: CYH) in the Franklin, Tenn.-based operator of acute care and outpatient facilities climbed 5.66% on Friday to $2.80.

Enviva moves lower

Enviva Partners’ 6½% senior notes due 2026 (Caa2/CC/CC) fell 2 points on Friday to a quote of 43½ bid by the end of the session, a source said.

Trading was thin on $1 million reported volume.

In the prior session, the bonds dropped 8¼ points to 44¼ bid on $27 million of trading.

On Tuesday, the issue was up 9 points at 53 bid on $28.44 million of volume.

The paper slid more than 31 points in the previous week after Enviva reported heavy third-quarter losses and doubt about its ability to continue as a going concern.

The Bethesda, Md.-based industrial wood pellets manufacturer’s stock (NYSE: EVA) rallied 17.65% to close at $1.60 on Friday.

Distressed index declines

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns declined on Thursday to minus 0.12% from 0.16% on Wednesday and 0.07% at the start of the week.

Month-to-date total returns softened to 2.17% on Thursday versus 2.29% midweek but were up from 0.94% on Monday.

Year-to-date distressed total returns declined to 12.91% in the prior session from 13.04% on Wednesday but were improved from 11.54% at the week’s start.

© 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.