Rite Aid notes, CDS spreads better; Talen paper, CDS spreads soften; Mallinckrodt up

By Cristal Cody

Tupelo, Miss., April 14 – Secondary action thinned on Thursday ahead of the long holiday weekend with a handful of distressed bond issuers active over the day.

Rite Aid Corp.’s notes improved about 7/8 point to 1 point following its weak earnings announcement.

“Rite Aid was up on the day for the credit, and the equity bounced around but ended the day down 3%,” a source said.

Rite Aid’s 7½% senior secured notes due 2025 (B3/CCC/BB-) rallied to 91 bid by the early close, up 1 point.

The drugstore company’s credit default swap spread decreased the past week ended Wednesday by 46 bps to 1,670 bps.

Talen Energy Supply LLC’s senior notes and CDS spreads remained soft on Thursday on the heels of a second ratings downgrade, a source said.

Talen’s 6½% senior notes due 2025 (C/CC/CCC) were last seen at 32 7/8 bid and ending the week over 3 points softer.

Talen’s CDS spreads widened 242 bps for the week ended Wednesday to 8,346 bps.

Also Thursday, Mallinckrodt plc’s notes improved following the company’s announcement of plans for a $900 million first-term lien loan as it nears exiting Chapter 11 bankruptcy.

Mallinckrodt’s 5 5/8% notes due 2023 moved higher to 50 bid, up from the 48¾ bid area a week ago, a source said.

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