Bausch paper extends losses; Endo bonds mostly lower; Rite Aid notes flat, CDS spreads firm

By Cristal Cody

Tupelo, Miss., July 14 – Bausch Health Cos. Inc.’s notes continued to dive in the secondary market Thursday, moving ¾ point to 1¼ points lower by the close.

The pharmaceutical company’s 5¼% senior notes due 2031 (B3/B-/B) sank 1¾ points in early trading before ending the day down 1¼ points.

Endo International plc’s bonds mostly declined in light trading with the paper remaining under pressure since the pharmaceutical manufacturer missed a $38 million bond interest payment in June.

The financial markets were mixed Thursday with focus shifting to a growing expectation of another U.S. Federal Reserve rate hike following higher-than-expected June inflation data released Wednesday, sources said.

The iShares iBoxx High Yield Corporate Bond ETF was down 14 cents, or 0.19%, to $74.55.

Looking at the pharmacy retail space, Rite Aid Corp.’s 8% senior secured notes due 2026 (B3/CCC-/BB-) were little changed in thin trading, while its credit default swaps spreads tightened more than 150 basis points this week.

The distressed space remains weak with index returns through Wednesday in negative territory.

Bausch Health pressured

Bausch Health’s paper declined further Thursday with the paper under pressure over most of the week, a source said.

The Laval, Quebec-based pharmaceutical company’s 5¼% senior notes due 2031 (B3/B-/B) went out down 1¼ points at 44½ bid.

The notes are down more than 7 points this week.

Bausch Health Americas, Inc.’s 8½% senior notes due 2027 (B3/B-/B) fell ¾ point to 64¼ bid over the session after dropping 4½ points on Wednesday.

The notes were more than 6 points lower on the week.

Endo paper softens

Meanwhile, Endo’s bonds were mostly weaker Thursday, a source said.

Endo Finance LLC’s 6% senior notes due 2028 (Caa3/C) were up modestly in thin trading near the 9 bid area.

Endo Luxembourg Finance Co. Sarl’s 6 1/8% senior secured first-lien notes due 2029 (Caa2/CC) declined more than 1¾ points to 77 bid by late in the day.

Endo subsidiary Par Pharmaceutical Inc.’s 7½% senior secured notes due 2027 (Caa2/CC) also dropped 1¼ points Thursday to 77½ bid.

Endo reported on June 30 that it missed a $38 million interest payment on the 6% issue.

The Dublin-based pharmaceuticals company has a 30-day grace period before a default is declared.

Rite Aid mostly flat

Rite Aid’s 8% senior secured notes due 2026 (B3/CCC-/BB-) went out mostly unchanged at the 79, 80 bid range, a source said Thursday.

The issue was about ½ point lower on the week.

Rite Aid’s CDS spreads, meanwhile, tightened more than 150 bps over the past week ended Wednesday to 1,998 bps, a source said.

The Camp Hill, Pa.-based drug retailer completed a tender offer in June for three tranches of bonds but declined to accept any of the 8% paper tendered.

Distressed index soft

The S&P U.S. High Yield Corporate Distressed Bond Index improved slightly Wednesday but remained weak both month to date and year to date.

One-day total returns were minus 0.44%, compared to minus 0.45% on Tuesday and minus 0.08% on Monday.

Month-to-date total returns widened to minus 1.49% on Wednesday from minus 1.05% on Tuesday and minus 0.6% at the week’s start.

Year-to-date total returns softened Wednesday to minus 23.77% versus minus 23.44% on Tuesday and minus 23.09% on Monday.

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