Hawaiian Airlines rises; Spirit Airlines declines; Level 3 bonds mixed; CommScope down

By Cristal Cody

Tupelo, Miss., Nov. 27 – Overall secondary supply stayed light in the first full post-Thanksgiving session with distressed bonds from airlines commanding much of the action, sources said.

Hawaiian Airlines, Inc.’s 5¾% first-lien senior secured notes due 2026 (Ba3) were moving with a high 70s handle on $10 million of trading in the most active issue seen, according to a market source on Monday.

The notes have picked up more than 3 points in November.

Spirit Airlines Inc.’s 8% senior secured notes due 2025 (B2) were softer in post-holiday trading and carried a yield of nearly 30% on Monday.

The bonds have dropped about 4 points over the past week.

Stocks closed the day slightly lower. The S&P 500 index was down 0.2%, while the iShares iBoxx High Yield Corporate Bond ETF moved up 11 cents, or 0.15%, to $75.11.

The CBOE Volatility index also was 1.85% higher at 12.69.

Level 3 Financing, Inc.’s paper traded flat to lower over the session.

Level 3’s 3¾% senior notes due 2029 (B3/CCC+/CCC+) went out unchanged on $6 million of volume.

The company’s bonds were yielding around 25% to 25½%.

CommScope Holding Co., Inc.’s notes were pressured out of the gate and were trading lower on Monday, sources said.

The 6% senior notes due 2025 (Caa2/CCC-) have shed 1 point in the past week.

Hawaiian Airlines active

Hawaiian Airlines’ 5¾% first-lien senior secured notes due 2026 (Ba3) traded on Monday better at 79¾ bid and a 17.26% yield, a market source said after the close.

The bonds were among the day’s most active distressed notes on $10 million of volume.

In the same session a month ago, the issue was quoted at 76 bid and a 19.28% yield.

Honolulu-based Hawaiian Holdings, Inc. in October reported third-quarter losses due in part to the West Maui wildfires in August.

Shares (Nasdaq: HA) closed the day down 12.7% to $4.40.

Spirit Airlines lower

Spirit Airlines’ 8% senior secured notes due 2025 (B2) softened on Monday to 70¾ bid and a yield of 29.43%, a source said.

The bonds saw $6.7 million of secondary activity during the session.

In the same session a week ago, the issue traded at 74¾ bid and a yield of 25.75%.

The Miramar, Fla.-based low-cost airline reported heavy third-quarter losses in October and was subsequently downgraded by Moody’s Investors Service.

Spirit Airlines’ stock (NYSE: SAVE) closed 3.46% better on Monday at $13.46.

Level 3 flat to lower

Level 3’s 3¾% senior notes due 2029 (B3/CCC+/CCC+) went out flat on the day at 36¾ bid on $6 million of volume, a source said.

The 4¼% senior notes due 2028 (B3/CCC+/CCC+) were quoted at 45¼ bid on $3 million of trading on Monday.

The company’s bonds were yielding around 25% to 25½%.

Parent Denver-based telecommunications company Lumen Technologies, Inc. plans to conduct a debt exchange after reaching an agreement with creditors holding about $7 billion of its debt.

CommScope pressured

In lighter supply on Monday, CommScope Technologies LLC’s 6% senior notes due 2025 (Caa2/CCC-) softened to 77¾ bid and a 24.08% yield on $3 million of activity, a source said.

In the same session last week, the bonds traded at 78¾ bid and a 22.9% yield.

CommScope, Inc.’s 8¼% senior notes due 2027 (Caa2/CCC-) were holding in slightly better. The issue went out at 46¼ bid and a 38.56% yield on Monday. Volume totaled $3 million.

The Hickory, N.C.-based network infrastructure manufacturer’s issue has declined ¼ point since the week-ago session when it was quoted at 46½ bid and a yield of 38.16%.

Distressed returns zero

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns were zero in the short session after Thanksgiving Day.

One-day total returns declined from 0.22% at the start of the prior week.

Month-to-date total returns improved to 2.6% on Friday versus 2.32% in the first session of the holiday week.

Year-to-date distressed total returns also ended Friday higher at 13.38% compared to 13.02% in the Nov. 20 session.

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