Bausch Health bonds gain in April; Altice France paper moves higher; supply thins

By Cristal Cody

Tupelo, Miss., April 8 – Bausch Health Cos. Inc.’s bonds extended a rally from last week into Monday, but supply remained light following a lawsuit the company filed to protect its Xifaxan drug against generic rivals.

Bausch’s 4 7/8% senior secured notes due 2028 (Caa1/CCC+/B) were trading over 6 points better from a week ago.

“On the week, they’re pretty good,” a source said.

Bausch’s 6 1/8% senior secured notes due 2027 (Caa1/CCC+/B) rallied 3½ points on $6 million of trading in the company’s most active tranche on Monday.

Broader secondary action stayed light on Monday with traders awaiting March inflation data due midweek and the afternoon solar eclipse slowing activity across the country.

Distressed volume was quoted at $138 million by the close.

Stocks were mostly flat with the S&P 500 down 0.04% and the Nasdaq up 0.03% on the day.

Treasury yields jumped with the benchmark 10-year Treasury note yield up 4 basis points to 4.42%.

The iShares iBoxx High Yield Corporate Bond ETF added 18 cents, or 0.23%, on Monday to $77.

The CBOE Volatility index retreated over 5% to 15.19.

Meanwhile, the leveraged loan trailing 12-month default rate rose for the eighth consecutive month to 3.79% at the end of March, while the rate for high-yield bonds hit 2.96%, Fitch Ratings reported on Monday.

Six defaults last week represented the highest weekly number so far this year, according to a S&P Global Ratings report on Monday.

Paper from Altice France Holding Restricted Group and affiliates improved around ¼ point to 2 points as the name remains strongly traded since its March earnings report and guidance alarmed investors and prompted ratings downgrades on concerns of a default or distressed exchange.

Altice’s 10½% senior notes due 2027 (Ca/CCC-) traded up 2 points over the day and have climbed 5 points from a week ago.

Bausch picks up

Bausch Health’s 4 7/8% senior secured notes due 2028 (Caa1/CCC+/B) went out stronger on Monday at 61¼ bid on $5 million of trading, sources said.

The bonds climbed from 58¼ bid, 59¼ offered on Friday and from 54 bid, 55 offered in the same session a week ago.

Bausch Health’s 6 1/8% senior secured notes due 2027 (Caa1/CCC+/B) rallied 3½ points to 70½ bid on $6 million of supply in the name’s most active tranche on Monday.

Bausch’s 11% senior secured first-lien notes due 2028 (Caa1/CCC+/B) were quoted trading at 74½ bid on $3 million of volume.

Bausch announced on Friday that it and its gastroenterology business, Salix Pharmaceuticals, Inc., filed a lawsuit in the U.S. District Court for the District of New Jersey against Amneal Pharmaceuticals of New York, LLC, Amneal EU, Ltd., Amneal Pharmaceuticals, LLC, Amneal Pharmaceuticals Private Ltd. and Amneal Pharmaceuticals, Inc.

The Laval, Quebec-based global pharmaceutical company said the lawsuit concerns a generic drug application Amneal submitted to market for Bausch’s Xifaxan drug.

Altice notes higher

Altice France Holding SA’s 10½% senior notes due 2027 (Ca/CCC-) traded up 2 points to 41 bid on $11 million of volume on Monday and have climbed 5 points from a week ago, sources said.

The issue was quoted on Friday at 38½ bid, 39½ offered on more than $11 million of activity.

The notes have improved from where the issue traded in the same session a week ago at 36 bid, 37 offered but remain well off from where it was quoted mid-March at 70½ bid, 71½ offered.

Altice France SA’s 5 1/8% senior secured notes due 2029 (Caa1/CCC+) traded up ½ point to 68¾ bid on $10 million of supply on Monday.

The Paris-based telecommunications company’s bonds have been pressured since Altice France in March lowered its guidance and highlighted potential haircuts for debt holders to reduce its leverage.

Distressed index declines

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns ended Friday weaker at minus 0.32%.

Returns came to 0.39% on Thursday, negative 0.15% on Wednesday, negative 0.78% on Tuesday and negative 0.39% at the start of the prior week.

Month-to-date total return losses widened to minus 1¼% from minus 0.93% Thursday, negative 1.31% Wednesday, negative 1.17% on Tuesday and negative 0.39% at the week’s start.

Year-to-date total returns dropped to 0.85% on Friday from 1.18% on Thursday, 0.79% on Wednesday, 0.94% on Tuesday and 1.73% in the week’s first session.

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