Midas climbs over 18 points; Wesco adds to gains; PBF Energy declines; 99 Cents better

By Cristal Cody

Tupelo, Miss., Feb. 11 – The 7 7/8% senior notes due Oct. 1, 2022 (C/CC) from Midas Intermediate Holdco II LLC roared past a low 80s handle headed into the weekend with the notes up more than 18 points over the past two sessions.

The issue from the company doing business as Service King traded 9½ points higher on Friday after gaining 9 points on Thursday following news reports the company is discussing a possible restructuring or bankruptcy filing.

Secondary volume was light with only $250,000 of issues traded Friday following supply of $2 million on Thursday, a source said.

Wesco Aircraft Holdings Inc.’s 9% senior secured notes due 2026 (Caa3/CCC+) also continued to improve on Friday with the issue quoted 5¼ points better after adding 4¼ points the previous day following news reports this week the company hired restructuring advisers.

Overall market tone remained weak on the heels of Thursday’s decline after the U.S. Bureau of Labor Statistics reported the overall U.S. Consumer Price Index was up 7.5% for the 12 months ending January, the largest annual rise since 1982.

Market participants are eyeing a possible Federal Reserve rate hike of 50 basis points or more in March.

The iShares iBoxx High Yield Corporate Bond ETF fell another 32 cents on Friday after dropping $1.11 in the prior session to finish at $82.66.

Volatility remained strong over the session with stock indices down over 1%.

The Chicago Board Options Exchange’s CBOE Volatility index, which jumped nearly 20% on Thursday, rose another 15.47% on Friday to 27.61.

March and April oil prices rallied about $3 as fears of a Russian invasion of Ukraine continued.

West Texas Intermediate crude oil benchmark futures for March deliveries settled $3.22 higher at $93.10 a barrel.

PBF Energy Inc.’s senior notes declined about ½ point to 3½ points by the end of the session.

In other distressed junk paper, 99 Cents Only Stores LLC’s 7½% senior secured notes due 2026 (Caa2/B-) traded 1½ points better.

The company is listed amongst the largest and most distressed names in the market currently, according to a BofA Securities, Inc. note on Friday.

Midas bonds climb

Midas Intermediate Holdco II’s 7 7/8% senior notes due Oct. 1, 2022 (C/CC) climbed 9½ points to hit 93½ bid over Friday’s session, a source said.

The bonds were 9 points better on Thursday.

The Service King notes were trading at 99¼ bid at the end of January.

In October, the Richardson, Tex.-based auto body repair provider’s $700 million term loan lenders hired financial advisers as the company faced a $15 million interest payment due on the $375 million outstanding of 7 7/8% notes, according to a Fitch Ratings note.

Service King is majority-owned by Blackstone Group LP.

Wesco trades higher

Wesco’s 9% senior secured notes due 2026 (Caa3/CCC+) also saw gains on Friday with the notes 5¼ points better on the day and 13¾ points higher this week, a source said.

The issue was quoted Friday at 97 bid on $2.5 million of volume.

The bonds were up about 4¼ points on Thursday on $6 million of secondary trading.

Wesco, acquired in 2020 by an affiliate of investment firm Platinum Equity and combined with U.K.-based aerospace and defense industry supplier Pattonair Ltd., is doing business as Incora.

The Fort Worth-based aerospace supplier’s paper has been active in February following news reports that Incora hired restructuring advisers.

PBF notes drop

PBF’s 6% senior notes due 2028 (Caa1/B/B-) shed 3½ points on Friday and were quoted at 74 bid with more than $4.3 million of paper changing hands, a source said.

The Parsippany, N.J.-based petroleum refiner’s 7¼% senior notes due 2025 (Caa1/B/B-) also were off about ½ point at 85¼ bid by the close.

99 cents stronger

Meanwhile, 99 Escrow Issuer Inc.’s 7½% senior secured notes due 2026 (Caa2/B-) traded 1½ points better over the session at 76 bid, a market source said.

The notes saw $1 million of trading action.

99 Cents Only Stores is listed amongst the largest and most distressed names in the market currently, according to a BofA Securities note on Friday.

The discount retailer is based in Commerce, Calif.

Distressed index down

Distressed returns softened on Thursday.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return was minus 0.06% in the prior session, compared to 0.47% on Wednesday, minus 0.14% on Tuesday and 0.38% on Monday.

Month-to-date total returns came to 0.57% versus 0.62% on Wednesday, 0.15% on Tuesday and 0.29% at the start of the week.

Year-to-date returns were at minus 0.97% on Thursday, minus 0.91% on Wednesday, minus 1.38% on Tuesday and minus 1.24% on Monday.

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