WeWork notes drop; First Republic down; Huntington Bancshares gains; CURO weakens

By Cristal Cody

Tupelo, Miss., April 11 – WeWork Inc.’s notes moved lower on Tuesday in active trading as its stock hit a new record low, sources reported.

The bonds have been under pressure since the company launched exchange offers and consent bids for two tranches of notes a week ago.

WeWork’s 7 7/8% senior notes due 2025 (CC/C) declined more than 3 points during the session.

“They’ve been down the last couple of days,” a source said. “They were in the low 50s last Thursday, and today they last traded at 43¼.”

WeWork’s stock hit a record low on Monday of 69 cents before moving even lower on Tuesday.

Bank and finance paper in the distressed space was mixed during the session.

First Republic Bank’s 4 3/8% subordinated notes due 2046 (B2/B-) gave back another point after softening 1 point on Monday.

Huntington Bancshares Inc.’s paper, down Monday, improved “a smidge” in trading on Tuesday, a source said.

The 5.7% series E fixed-to-floating rate non-cumulative perpetual preferred stock (Baa3/BB+) was seen about ½ point better after softening more than 1¼ points on Monday.

Meanwhile, finance company CURO Group Holdings Corp.’s 7½% senior secured notes due 2028 (Caa1/CCC+) fell ½ point on $10 million of trading on Tuesday as one of the most active issues, a source said.

Market tone was mostly flat by the close with stock indices mixed.

The iShares iBoxx High Yield Corporate Bond ETF rose 16 cents to $74.93.

The CBOE Volatility index edged up 0.7% to 19.10.

Overall distressed secondary activity stayed quiet on Tuesday ahead of the Consumer Price Index inflation data release on Wednesday.

“It’s been pretty quiet,” a source said. “People are sort of just waiting for the CPI number tomorrow.”

WW International Inc.’s bonds were “not doing much today” with the 4½% senior secured notes due 2029 (B1/B) up about ½ point, but the company’s stock surged 59% on the day, a trader said.

The company announced Monday that it closed on its acquisition of a telehealth provider.

WeWork declines

WeWork 7 7/8% senior notes due 2025 (CC/C) traded more than 3 points lower on Tuesday at 43 bid, 44 offered, a source said.

The notes were heading out at 43¼ bid.

Another source saw the bonds down 3½ points at 43 bid on $9.2 million of trading.

The issue has declined from trading at 51½ bid, 52½ offered on Thursday.

WeWork announced note exchange offers on April 3 that expire May 1.

The New York-based office share company reported in March that it entered into agreements with an ad hoc group representing a majority of bondholders and its largest shareholder, SoftBank Group Corp., to reduce its net debt by approximately $1.5 billion, extend a debt maturity wall from 2025 to 2027 and provide new funding and new and rolled capital commitments of more than $1 billion.

WeWork’s stock hit a record low on Monday of 69 cents before moving even lower on Tuesday to finish down 5¾% at 55 cents. The 52-week high was $8.08.

First Republic lower

First Republic Bank’s 4 3/8% subordinated notes due 2046 (B2/B-) were quoted off about 1 point at 52 bid, 54 offered going out on Tuesday, a source said.

While the yield remained below 10%, “it’s trading at a distressed price,” the source said.

The San Francisco-based bank’s notes softened about 1 point also on Monday.

Huntington up

Huntington Bancshares’ 5.7% series E fixed-to-floating rate non-cumulative perpetual preferred stock (Baa3/BB+/BB+) improved on Tuesday to 86 bid, 87 offered, up from 85½ bid, 86½ offered on Monday, a source said.

The securities had dropped more than 1¼ points in Monday’s session.

The Columbus, Ohio-based bank will release its first-quarter earnings report on April 20.

Huntington Bancshares’ stock was up a dime on Tuesday at $11.40.

CURO notes dip

CURO Group Holdings’ 7½% senior secured notes due 2028 (Caa1/CCC+) fell ½ point to 40 bid on $10 million of trading on Tuesday, a market source said.

The bonds have been mostly trading in the 40 bid range.

“It’s been there for a couple of days,” a trader said.

The Wichita, Kan.-based consumer credit provider’s stock climbed 10% over the day to $1.65.

WW International eyed

WW International’s 4½% senior secured notes due 2029 (B1/B) traded Tuesday up about ½ point at 53 bid, 54 offered, a source said.

The company’s stock surged 59% to close at $6.55 on about 75.4 million shares traded, compared to the average volume of about 4.1 million shares.

WW International, formerly known as Weight Watchers International, Inc., announced Monday that it closed on its acquisition of telehealth company Weekend Health Inc.

The New York-based company reported in March that it would acquire the company, doing business as Sequence, for $132 million.

Distressed returns soft

S&P U.S. High Yield Corporate Distressed Bond index one-day returns stayed soft on Monday at 0.06%, compared to 0.07% in the short market session on Friday and 0.62% in the same session a week ago.

Month-to-date returns improved to minus 0.11% from minus 0.17% ahead of the holiday weekend.

Year-to-date total returns rose to 4.41% at the start of the week from 4.35% on Friday.

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