iHeartCommunications, CSC Holdings under pressure; CommScope notes trades down

By Abigail W. Adams

Portland, Me., Jan. 3 – The distressed debt space saw another down day on Wednesday with the broader market weak as the late year exuberance over rate cuts continued to fade.

The release of the Federal Open Market Committee minute notes continued to dampen the enthusiasm that pushed the market to its heights at the close of 2023.

While the rate hike campaign has run its course, rate cuts may not transpire as quickly as the market had anticipated, a source said.

The S&P High Yield Corporate Distressed Bond index opened the year with negative returns of 0.59% with losses increasing during Wednesday’s session.

Investors continued to shed their positions in weaker quality credits with several default candidates of 2024 suffering notable losses.

iHeartCommunications Inc.’s 8 3/8% senior notes due 2027 (Caa3/CCC+) were down almost 3 points after a run-up in December.

Altice USA, Inc. subsidiary CSC Holdings, LLC’s 7½% senior notes due 2028 (Caa2/CCC+) also ranked among the largest losers of the session with the notes off more than 2 points.

CommScope Holding Co., Inc.’s 8¼% senior notes due 2027 (Caa2/CCC-) were also lower.

Altice Group, iHeartCommunications and CommScope are all being eyed as default candidates, which sources expect to see an uptick of over the coming year.

iHeart under pressure

iHeartCommunications’ 8 3/8% senior notes due 2027 continued to shed its gains from the run up into the final weeks of 2023.

The 8 3/8% notes were off 2½ to 3 points in active trade.

The notes broke below a 62-handle and were wrapped around 61¾ heading into the market close, according to a market source.

The yield rose to 26 3/8%.

There was $12 million in reported volume.

The 8 3/8% notes saw a late December surge with the notes trading as high as 66 into the closing days of 2023 after sliding as low as 58 in early December following a ratings downgrade.

CSC Holdings drops

CSC Holdings’ 7½% senior notes due 2028 also ranked among the largest losers of Wednesday’s session with the notes off more than 2 points.

The notes fell to a 71-handle and were trading in the 71 to 71½ context heading into the market close, according to a market source.

The yield was about 17 3/8%.

There was $6 million in reported volume.

The notes were also boosted in the late December rally and opened the first trading day of 2024 on a 74-handle.

CommScope lower

CommScope’s 8¼% senior notes due 2027 were lower on Wednesday as investors shed their positions in weaker quality credits.

The 8¼% senior notes were off more than 1 point in active trade.

They were trading in the 50¾ to 51 context, according to a market source.

The yield was about 35¼%.

There was $6 million in reported volume.

While the broader market rallied in late December, CommScope’s senior notes were laggards with the network infrastructure provider a highly speculative credit, a source said.

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