Spirit Airlines weaker on merger termination; DISH bonds mixed on refinancing efforts

By Abigail W. Adams

Portland, Me., March 4 – The broader market was flat on Monday with the market response to the slew of macro data released last week muted.

However, topical news kept several distressed debt credits moving.

Spirit Airlines Inc.’s senior notes were slightly weaker after JetBlue Airways Corp. and Spirit announced the official end of their merger agreement.

While lower, there was not heavy selling in the name with the market largely anticipating the results.

DISH DBS Corp.’s senior notes were mixed in active trade as parent company EchoStar Corp. works to secure financing to address the soon-to-mature 5 7/8% senior notes due Nov. 15, 2024 (Caa2/CCC+).

Spirit Airlines weaker

Spirit Airlines’ senior notes were weaker in active trade after JetBlue and Spirit Airlines formally terminated their merger agreement.

While lower, the news did not spark massive selling in the name with the market widely anticipating the outcome, a source said.

Spirit Airlines’ 8% senior secured notes due 2025 (Caa2) were down about 1 point to trade in the 72 to 73 context.

The yield was about 31 1/8%.

There was $13 million in reported volume.

Spirit Airlines and JetBlue conceded on Monday that their appeal of the federal court decision that struck down their merger in January would most likely be unsuccessful.

While the 8% secured notes have rallied on optimism over a successful appeal and completion of the merger, the company has also taken proactive steps to shore up their balance sheets in case the merger was not consummated.

DISH mixed

DISH’s senior notes were mixed in active trade on Monday as the market further digested parent company EchoStar’s going-concern warning.

The soon-to-mature 5 7/8% senior notes due 2024 (Caa3/CCC+) were slightly weaker on Monday after gaining strength following the announcement that the company did not have the cash on hand to cover the $2 billion outstanding.

The notes were off about ½ point and trading at 94 3/8 in the late afternoon, a source said.

The yield was about 14 5/8%.

There was $9 million in reported volume.

DISH’s 7¾% senior notes due 2026 (Caa3/CC) were largely unchanged at 66¼ with the yield 28 5/8%.

The 5¾% senior notes due 2028 (Caa1/B-) improved.

The notes added about ½ point to trade at 69 3/8 in the late afternoon with the yield 15%.

There was $7 million in reported volume.

While EchoStar announced the company did not have the cash to cover its November maturity on Friday, the company is actively taking steps to secure the necessary financing, sources said.

Indexes

The S&P U.S. High Yield Corporate Distressed Bond index gained 0.20% on Friday, lifting the year-to-date return to 2.82%.

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