WW International bonds shaky amid competition; ‘slim chance’ for Fed move

By Cristal Cody

Tupelo, Miss., Jan. 23 – The new year is putting pressure on WW International Inc.’s bonds and stock.

The WeightWatchers owner faced an unhappy start to 2024 after Eli Lily & Co. announced on Jan. 4 a rival new digital health service that enables patients to receive the GLP-1 weight loss drugs.

WW’s 4½% senior secured notes due 2029 (B3/B) traded higher in back-to-back sessions but remain down more than 10 points since the end of December.

The notes had rallied 7/8 point on Monday to 53 5/8 bid on more than $23 million of paper traded and by late Tuesday were slightly better near the 53¾ bid to 54 bid area, but supply was much lighter on $5 million of volume, sources said.

WW’s stock is down nearly 50% so far in 2024.

Meanwhile, the benchmark 10-year note yield rose around 5 basis points to 4.14% as focus shifted to next week’s Federal Reserve’s rate decision.

“Not a lot is expected at the Fed meeting,” a market source said. “It’s a very slim chance they do anything at the next meeting. Overall, rates are expected to drop on the short end quite a bit.”

Distressed index returns have been pressured in January and remain weaker than other junk indexes.

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