CSC Holdings notes mostly higher; DISH, Hughes improve; iHeart notes end lower

By Cristal Cody

Tupelo, Miss., Feb. 14 – Bonds in the distressed cable- and communications-related spaces mostly turned higher on Wednesday with earnings reports taking focus.

Altice USA, Inc.’s securities traded down ¼ point to up 1 point after the company reported wider losses in the fourth quarter.

Subsidiary CSC Holdings, LLC’s 5¾% senior notes due 2030 (Caa2/CCC+) saw the bulk of action in the name on Wednesday, a source reported.

The bonds went out 1 point higher on $10 million of volume.

EchoStar Corp.’s bonds were mostly higher.

Subsidiary DISH DBS Corp.’s paper was flat to over 1 point better over the session.

Also, subsidiary Hughes Satellite Systems Corp.’s 6 5/8% senior notes due 2026 (Caa3/CCC+) traded ½ point stronger after softening on Tuesday.

Bonds adjusted Wednesday after Tuesday’s wide sell-off sparked by a surprise increase in January inflation data.

The benchmark 10-year Treasury note yield gave back about 5 basis points on Wednesday to end at 4.26% following a 14-bps jump on Tuesday.

The S&P 500 index recovered 0.96% after closing Tuesday down 1.37% a day earlier.

The iShares iBoxx High Yield Corporate Bond ETF added 30 cents, or 0.39%, to 76.87.

The CBOE Volatility index retreated 9.27% to 14.38.

“The inflation data and the shifting expectations for rate cuts are consistent with our oft-stated view that investors have probably gotten ahead of themselves in expecting rate cuts in the near term,” Confluence Investment Management analysts said in a note on Wednesday. “With egg on their faces for letting inflation get too high in 2021 and 2022, the Fed policymakers now want to be absolutely certain that price pressures have eased before they cut interest rates. As that continues to sink in with investors, the market could face further bouts of volatility.”

BNP Paribas Securities analysts on Tuesday pushed back their expectations of a May rate cut to June and lowered the expected cut size to 100 bps from 150 bps.

Meanwhile, January global corporate defaults hit 14, the highest monthly amount since 2010, S&P Global Ratings said in a report released Wednesday.

Global defaults last month were driven by the consumer and media and entertainment sectors in the United States and Europe.

The U.S. speculative-grade corporate default rate could reach 5% by September, while the European corporate speculative-grade default rate could hit 3¾%, S&P said.

iHeartCommunications, Inc. continues to feature on market default candidate lists, and the bonds were under renewed pressure on Wednesday, sources said.

The company’s bonds were moving about ¾ point to nearly 2 points lower.

CSC notes mixed

Altice USA subsidiary CSC Holdings’ 5¾% senior notes due 2030 (Caa2/CCC+) traded 1 point higher to go out at 48¼ bid on $10 million of trading on Wednesday, a market source said.

Lighter activity was seen in CSC’s 4 5/8% senior notes due 2030 (Caa2/CCC+), which were up nearly ¾ point at 45¾ bid on $2 million of volume.

The company’s 7½% senior notes due 2028 (Caa2/CCC+) fell ¼ point to 62 bid on $3 million of trading over the day.

Altice on Wednesday reported that fourth-quarter revenue declined 2.9% to $2.3 billion, while fiscal year 2023 revenue fell 4.3% to $9.24 billion.

Net losses in the fourth quarter widened to $180.7 million from $49.14 million of losses in the year-ago quarter. For the year, Altice reported positive but lower income of $118.57 million, down from $516.73 million of earnings in 2022.

The New York-based broadband communications company, which priced $2.05 billion of new 11¾% junk senior notes due 2029 in January, plans to drawdown $750 million under its revolving credit facility to repay its 5¼% senior notes due 2024 on Feb. 28.

DISH, Hughes improve

DISH DBS’ 5¼% senior secured notes due 2026 (B2/B-) traded up more than 1¼ points on a 78 bid handle with nearly $7 million of bonds changing hands on Wednesday, a source said.

The 5 1/8% senior notes due 2029 (Caa2/CC) that had been part of a bond exchange offer terminated in January improved ½ point to 40½ bid in light supply of over $2 million.

Meanwhile, Hughes Satellite’s 6 5/8% senior notes due 2026 (Caa3/CCC+) traded ½ point stronger at 66¼ bid on $7 million of volume after dropping on Tuesday in heavier supply totaling nearly $15 million.

The bonds went out the prior day at 65½ bid, 66½ offered, down from around 66 bid, 67 offered on Monday.

Parent company EchoStar opened the week with the termination of an exchange offer for two tranches of convertible bonds after the minimum tender conditions were not met. In January, EchoStar terminated exchange offers and consent solicitations for four tranches of senior notes from DISH after widespread pushback from creditor groups.

Englewood, Colo.-based satellite owner EchoStar also owns companies that include Boost Mobile, Sling TV and HughesNet.

iHeartMedia pressured

iHeartCommunications’ paper was among the weakest in the distressed market over the session, though overall action was light, a source said.

The 6 3/8% senior secured notes due 2026 (Caa1/B+) fell ¾ point to 82¾ bid on $4 million of trading.

The 5¼% senior secured notes due 2027 (Caa1/B+) dropped 1 point to a quote of 72 bid on $3.9 million of volume.

The company’s 8 3/8% senior notes due 2027 (Caa3/CCC+) moved down 1 7/8 points to 56¾ bid on $4.5 million of activity.

iHeartCommunications’ 4¾% senior secured notes due 2028 (Caa1/B+) declined over 1 point to around 69¼ bid on $5.7 million of supply on Wednesday.

Bonds in the subsidiary of San Antonio-based parent media broadcasting company iHeartMedia, Inc. were yielding around 15½% on the 2028 notes to over 30% on the 2027 tranche on Wednesday.

Distressed index declines

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns dropped in the wide sell-off on Tuesday to negative 0.94% from 0.37% on Monday.

Month-to-date total returns softened to 0.5% from 1.45% at the week’s start.

Year-to-date total return losses widened on Tuesday to negative 1.66% from minus 0.73% on Monday.

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