DISH leads secondary supply; iHeartCommunications moves up; Lumen bonds, CDS spreads improve

By Cristal Cody

Tupelo, Miss., Dec. 14 – DISH Network Corp. led secondary action in the junk and distressed markets Thursday as the paper shot up about 1 point to more than 5 points on over $90 million of trading in three tranches of notes.

The most distressed of the tranches, the 7¾% senior notes due 2026, were the strongest and up over 5 points.

DISH’s bonds have rallied this week in double-digit volume on expectations the company will close its merger with EchoStar Corp. as soon as this week.

DISH CDS spreads also tightened over 300 basis points this week.

iHeartCommunications, Inc.’s bonds jumped 3 points to over 5 points in trading Thursday.

The company’s 8 3/8% senior notes due 2027 (Caa3/CCC+) rallied 5¾ points.

iHeartCommunications’ CDS spreads, meanwhile, widened more than 150 bps after easing over 200 bps in the prior week.

Markets continued to absorb the Federal Reserve’s decision to leave rates unchanged Wednesday with stock indices all higher a second day.

The iShares iBoxx High Yield Corporate Bond ETF rose 34 cents, or 0.44%, to $77.10.

In other distressed names, Lumen Technologies, Inc.’s bonds and CDS spreads have rallied this week, a source reported.

Lumen’s 4% senior notes due 2027 (Caa2/B) moved up 4 points in Thursday’s session and were trading about 10 points better so far in December.

Lumen’s CDS spreads also came in nearly 1,000 bps this week and moved back under the 3,000 bps range.

DISH merger fuels rally

DISH DBS Corp.’s 7¾% senior notes due 2026 (Caa2/B-) climbed over 5 points to 71 bid on $20.3 million of secondary action Thursday, a source said.

The yield was 23.58%.

DISH’s bonds have rallied since the U.S. Federal Communications Commission announced a week ago that it approved the transfer of control of DISH Network and its subsidiaries to EchoStar.

Both public companies are controlled by majority shareholder Charles W. Ergen.

The senior notes were quoted in the same session a week ago up 3 points after the announcement at 64½ bid.

Looking at the company’s CDS spreads, DISH DBS’ CDS spreads came in 437 bps to 2,313 bps this week ended Wednesday, according to a report from Moody’s Investors Service.

DISH Network’s CDS spreads also tightened 355 bps over the week ended Wednesday to 1,881 bps.

The Englewood, Colo.-based satellite cable operator reported in a regulatory filing on Tuesday that it expects to close the merger with EchoStar as early as this week or by Dec. 29.

iHeartMedia jumps

iHeartCommunications’ 8 3/8% senior notes due 2027 (Caa3/CCC+) rallied over 5 points to 64¾ bid Thursday after going out Wednesday at 59 bid, a source reported.

Trading totaled $4 million in the issue.

iHeartCommunications’ 6 3/8% senior secured notes due 2026 (Caa1/B+) also improved 3 points to 84 bid in mostly light trading totaling over $4 million on Thursday.

The bonds were volatile on Wednesday on $7.52 million of supply.

The subsidiary of San Antonio-based parent media broadcasting company iHeartMedia, Inc. has around $3.1 billion of debt maturities due in 2026 and $1.7 billion due in 2027.

iHeartCommunications’ CDS spreads widened 152 bps over the past week ended Wednesday to 1,958 bps, according to a Moody’s report.

In the prior week, the company’s CDS spreads widened 219 bps.

Lumen gains

Lumen’s 4% senior secured notes due 2027 (Caa2/B/B-) rallied 4 points to head out Thursday at 63½ bid, a source said.

Trading was on the light side with $2 million reported but followed Lumen’s announcement on Wednesday that its Black Lotus Labs threat research and intelligence arm discovered and stopped a malicious botnet used by Chinese nation state cyber actors that targeted critical infrastructure providers and municipal governments in Guam and other regions.

The company's paper has moved up in December with the issue around 10 points better from where it was quoted Dec. 1 at the 53¼ bid area.

Lumen’s CDS spreads also tightened 956 bps this week in the period ended Wednesday to 2,924 bps, Moody’s said.

Spreads were 321 bps tighter in the prior week.

The Denver-based telecommunications company’s shares (NYSE: LUMN) closed the day 12.03% higher at $1.77 on more than double the average volume.

Distressed index up

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns improved midweek to 0.4% from 0.38% on Tuesday and 0.14% on Monday.

Month-to-date total returns jumped Wednesday to 2.83%, compared to 2.43% on Tuesday and 2.04% at the week’s start.

Year-to-date distressed total returns moved up to 18.29% from 17.82% in the prior session and 17.37% on Monday.

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