DISH picks up after clearing merger hurdles; Level 3, Lumen bonds mixed; WW notes climb

By Cristal Cody

Tupelo, Miss., Dec. 7 – DISH Network Corp.’s bonds dominated the junk and distressed markets on Thursday on more than $40 million of paper traded after the company cleared regulatory hurdles to its merger with EchoStar Corp.

DISH’s 7¾% senior notes due 2026 (Caa2/B-) rallied 3 points on more than $18 million of volume.

The bonds were still prominent in the distressed space with a yield of over 28%.

Level 3 Financing, Inc.’s paper was mostly better over the session, while parent Lumen Technologies, Inc.’s notes softened in light trading.

Level 3’s 3¾% senior notes due 2029 (B3/CCC+/CCC+) improved 1½ points, and the 3 5/8% senior notes due 2029 (B3/CCC+/CCC+) were trading just under ¾ point better.

Lumen’s 4½% senior notes due 2029 (Caa3/CCC-/CCC-) fell ½ point and were quoted with a handle in the low 20s.

The issuer’s credit default swap spreads came in more than 300 basis points this week.

Market tone turned positive ahead of the November jobs report due Friday.

The S&P 500 index closed 0.8% higher with the iShares iBoxx High Yield Corporate Bond ETF finishing up 13 cents, or 0.17%, to $76.01.

The CBOE Volatility index rose 0.69% to 13.06.

WW International Inc.’s 4½% senior secured notes due 2029 (B3/B) continued to climb in Thursday’s session after adding 2¾ points on Wednesday.

The bonds were up 1 point on more than $10 million of secondary trading.

DISH bonds climb

More than $43 million of DISH’s bonds were changing hands over the session after the regulatory approval, a source said Thursday.

DISH DBS Corp.’s 7¾% senior notes due 2026 (Caa2/B-) climbed 3 points to hit 64½ bid on over $18 million of paper traded.

On Wednesday, the notes added 1¾ points on about $6 million of activity.

DISH’s 5 1/8% senior notes due 2029 (Caa2/B-) improved more than 1½ points in Thursday’s session to a quote just under 47¾ bid on $14.9 million of volume. The yield was 22.04%.

The issue was more than ¾ point better on Wednesday on $3.5 million of trading.

The U.S. Federal Communications Commission announced on Wednesday that it approved the transfer of control of DISH Network and its subsidiaries to EchoStar.

The Englewood, Colo.-based satellite cable operator announced the merger in August, and the deal was expected to close before the end of the year. Both public companies are controlled by majority shareholder Charles W. Ergen.

DISH’s stock (Nasdaq: DISH) closed Thursday 9.85% higher at $4.35.

EchoStar’s shares (Nasdaq: SATS) finished the day 9.21% better at $12.45.

DISH’s CDS spreads were slightly wider on the week ahead of Thursday’s approval.

DISH Network’s CDS spreads eased 18 bps to 2,236 bps over the week ended Wednesday, according to a report from Moody’s Investors Service.

DISH DBS’ CDS spreads widened 23 bps to 2,750 bps during the same period.

Level 3, Lumen mixed

Level 3’s 3¾% senior notes due 2029 (B3/CCC+/CCC+) improved 1½ points to trade at 38 bid on $4 million of secondary supply on Thursday, a source said.

The company’s 3 5/8% senior notes due 2029 (B3/CCC+/CCC+) also were trading just under ¾ point better near 38 bid on $7 million of volume during the session.

Level 3’s 4¼% senior notes due 2028 (B3/CCC+/CCC+) picked up ¼ point to a quote of 42¾ bid on $4 million of paper changing hands.

Meanwhile, parent Lumen’s 4½% senior notes due 2029 (Caa3/CCC-/CCC-) softened ½ point to a quote of 22 bid on $5 million of secondary supply on Thursday.

The bonds were yielding over 44%.

Lumen’s CDS spreads came in 321 bps over the week ended Wednesday to 3,880 bps, according to a Moody’s note.

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

Lumen’s shares (NYSE: LUMN) finished down 2.7% to $1.44.

WW notes higher

WW International’s 4½% senior secured notes due 2029 (B3/B) traded 1 point better on Thursday to hit 60 bid on $10.8 million of trading supply, according to a market source.

The bonds have been strongly traded in the distressed space this week and added 2¾ points on Wednesday on $23.4 million of activity.

On Tuesday, the issue fell ¼ point to 56¼ bid on $14.25 million of volume.

The New York-based WeightWatchers operator in November reported a third-quarter profit after posting heavy losses a year ago.

Distressed returns dip

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns softened midweek to 0.3% from 0.72% on Tuesday and 0.43% on Monday.

Month-to-date total returns were stronger at 1.56% on Wednesday versus 1.26% on Tuesday and 0.54% at the start of the week.

Year-to-date distressed total returns improved to 16.82% midweek from 16.48% on Tuesday and 15.65% on Monday.

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