Macy’s paper little changed; Michaels lower; Altice turns positive, subsidiary CSC declines

By Cristal Cody

Tupelo, Miss., April 2 – Macy’s, Inc.’s plan to close 150 of its stores as it faces a takeover offer have done little to budge its bonds, which remained firmly out of the distressed space Tuesday.

“Not much has traded in Macy’s today,” a source said. “Their bonds are yielding like 6½% [but] they have a lot of debt.”

Macy’s notes softened modestly to around ¾ point on over $8 million of volume spread across the paper Tuesday.

Macy’s Retail Holdings Inc.’s 4½% senior notes due 2034 (Ba2/BB+) fell ½ point to an 87 bid handle on $2 million of activity.

The junk-rated retailer previously was investment-grade, only one of eight companies initially rated AAA that have defaulted in the years from 1981 through 2023, according to a S&P Global Ratings default report.

Macy’s is listed as a downgrade candidate by BofA Securities junk analysts.

In early March, Macy’s confirmed it received an unsolicited takeover offer for its outstanding stock from Arkhouse Management Co. LP and Brigade Capital Management, LP for $24 per share, almost $2 higher than its current 52-week high.

Macy’s said March 3 it would review and evaluate the proposal but has not released a statement since.

The company announced in February plans to close the underperforming stores, while also expanding its other brands, including Bloomingdale’s.

In other news, advance estimates of U.S. retail and food services sales for February rose a seasonally adjusted 0.6% from January and 1½% above February 2023, according to the U.S. Census Bureau.

Retail trade sales rose 0.6% in February.

March advance monthly sales figures will be released April 15, along with February monthly retail trade data.

Elsewhere, distressed arts and crafts retailer Michaels Cos, Inc.’s paper was mixed Tuesday but mostly softer on light trading of around $4 million after the notes rallied in the prior week in heavy supply following a positive earnings report.

“They aren’t going anywhere,” a trader said. “The bonds are down 1/8 point. Not much is trading.”

Michaels’ 7 7/8% senior notes due 2029 (Caa2/CCC-) traded off 1/8 point to less than 1/8 point higher over the session.

Stocks were pressured and stayed weak headed into the close as Treasury yields increased. Equity indexes all declined. The S&P 500 fell 0.72% and the Nasdaq dropped 0.95%.

The iShares iBoxx High Yield Corporate Bond ETF went out off 13 cents, or 0.17%, at $76.89.

“Today was down,” a source said. “Earlier in the day, the ETFs, HYG were down more, so they recovered a little bit.”

The CBOE Volatility Index climbed over 7% to $14.61 by the close.

The benchmark 10-year Treasury yield note picked up 3 basis points by the end of the day to 4.37%.

Meanwhile, Altice France Holding Restricted Group’s bonds had some relief Tuesday from the relentless drive lower in the prior week and on Monday.

Altice France Holding SA’s 10½% senior notes due 2027 (Ca/CCC-) rallied over 2 points on $13 million of secondary action.

Altice USA, Inc. subsidiary CSC Holdings, LLC’s bonds were mixed but mostly lower.

The 4 1/8% guaranteed senior notes due 2030 (B2/B-) fell 1 point on $11 million of trading Tuesday.

Michaels edges down

Michaels’ 7 7/8% senior notes due 2029 (Caa2/CCC-) declined 1/8 point to 75 5/8 bid in light supply that hit just $2 million on Tuesday, a source said.

In the same session a week ago, the notes climbed over 5 points on more than $50 million of bonds traded.

Michaels’ higher-rated 5¼% senior secured notes due 2028 (B2/CCC+) fell over ½ point by the end of the session. The issue was quoted at 84 5/8 bid on under $2 million of trading.

The Irving, Tex.-based arts and crafts retailer was taken private in 2021 by funds managed by Apollo Global Management, Inc. affiliates.

Altice, CSC bonds mixed

Altice France Holding’s 10½% senior notes due 2027 (Ca/CCC-) rallied over 2 points to 38½ bid on $13 million of secondary action over the day, a market source reported.

The bonds gave back 1¼ points on Monday.

The 6% senior notes due 2028 (Ca/CCC-) recovered 1½ points to head out at 30 bid on $9 million of paper changing hands.

The Paris-based telecommunications company’s bonds slid from a handle in the 70s after Altice announced March 20 weaker quarterly results following reports the company hired financial and legal advisers.

Meanwhile, Altice USA subsidiary CSC Holdings’ 4 1/8% guaranteed senior notes due 2030 (B2/B-) fell 1 point to 69½ bid on $11 million of trading Tuesday.

CSC’s 5¾% senior notes due 2030 (Caa2/CCC) dropped 2¼ points to 50¼ bid on $7 million of volume.

The New York-based Altice USA broadband communications company’s paper has been volatile since market chatter erupted in February that Charter Communications, Inc. was considering a merger.

Distressed index negative

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns stayed in the negative as April kicked off with minus 0.39% of returns Monday.

The month so far has logged negative 0.39% of returns, improved from where March ended with month-to-date total returns at negative 0.47%.

Year-to-date total returns were lower at 1.73%, compared to 2.13% ahead of the holiday weekend.

© 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.