Mallinckrodt bonds stabilize in active trading; Bed Bath & Beyond under pressure

By Abigail W. Adams

Portland, Me., Sept. 30 – While the new deal pipeline and end-of-quarter clean-up were the primary focus of Thursday’s session, topical and earnings-related news sparked heavy volume and large price movements in some distressed debt names.

Following Wednesday’s tumble, Mallinckrodt LLC’s junk bonds were trading off their lows heading into Thursday’s close.

Mallinckrodt’s 5¼% senior notes due 2025 traded as low as 48 early in Thursday’s session, according to a market source. However, the notes improved heading into the close and were trading on a 50-handle.

The pharmaceutical company’s 5 5/8% notes due 2023 traded as low as 47¾ on Thursday. However, they also stood poised to close the day on a 50-handle.

Bed Bath & Beyond Inc.’s capital structure was under pressure after the retailer reported disappointing earnings.

The 5.165% senior notes due 2044 sank about 4 points although the notes were “all over the place,” a source said.

They traded as low as 86 and as high as 89.9 during Thursday’s session but were changing hands in a range of 86 to 87 heading into the close, the source said.

Bed Bath & Beyond’s 3.749% senior notes due 2024 were down 1 5/8 points to close the day at 102.

The company’s stock sank more than 22%.

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