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Rite Aid bonds move higher, CDS spreads gap out; Michaels sheds gains; AMC slips
By Cristal Cody
Tupelo, Miss., Oct. 12 – Rite Aid Corp.’s bonds continued to rally on Thursday in the distressed debt market after the retailer reported that “it is unable” to file its quarterly report.
Rite Aid announced during the session that it cannot file “without unreasonable effort or expense” the 10-Q for the quarter ended Sept. 2 but expects to on or before Oct. 17.
But when it does, it warned investors that it anticipates it will report a “significant increase in net loss for the quarter,” along with a major increase in outstanding debt.
Rite Aid’s 7½% senior secured notes due 2025 (Caa3/C/B) climbed over 1¼ points to head out at 66 bid on $6 million of volume, a source said.
The 8% senior secured notes due 2026 (Caa3/C/B) also added ¾ point to 66¼ bid on $4.3 million of trading on Thursday.
The drugstore chain’s CDS spreads moved out this week to nearly 60,000 basis points.
In other distressed retailers, Michaels Cos, Inc.’s 7 7/8% senior notes due 2029 (Caa2/CCC-) gave back 1 point over the session to head out at 61 bid, a market source said.
Elsewhere, AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) fell ¾ point to 79½ bid, a source said.
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