Lumen, Level 3 drop; Glatfelter up; CommScope mostly soft; distressed returns strong

By Cristal Cody

Tupelo, Miss., Dec. 1 – Lumen Technologies, Inc.’s and Level 3 Financing, Inc.’s bonds came under pressure in the secondary market on Friday.

Lumen’s 4% senior secured notes due 2027 (Caa2/B/B-) traded down around ¼ point.

Level 3 Financing’s 3¾% senior notes due 2029 (B3/CCC+/CCC+) were around ½ point lower over the day and about 2½ points softer on the week.

The 4¼% senior notes due 2028 (B3/CCC+/CCC+) were down more than 1¼ points on Friday and more than 5 points from the start of the week.

Overall market distress waned over the session.

The CBOE Volatility index declined 2.24% to 12.63.

Stock indices all closed stronger as risk-on tone grew with Treasury yields down 9 basis points to 14 bps.

The S&P 500 index improved 0.59%, while the iShares iBoxx High Yield Corporate Bond ETF added 60 cents, or 0.8%, to $75.97.

Glatfelter Corp.’s 4¾% senior notes due 2029 (Caa1/CCC) picked up 1 point in fairly active afternoon trading that topped $5 million.

The company’s credit default swap spreads widened this week.

Elsewhere Friday, CommScope Holding Co., Inc.’s paper traded mostly lower.

The 6% senior notes due 2025 (Caa2/CCC-) fell ¾ point.

Lumen, Level 3 lower

Lumen’s 4% senior secured notes due 2027 (Caa2/B/B-) traded down around ¼ point on Friday to the 53¼ bid area, a source said.

The issue saw nearly $6 million of volume.

Paper from subsidiary Level 3 Financing moved lower over the session and was trading with a 34 bid handle.

Level 3 Financing’s 3¾% senior notes due 2029 (B3/CCC+/CCC+) softened ½ point to the 34¼ bid area on $4 million of activity.

The bonds have dropped from where they were quoted on Monday at 36¾ bid.

Level 3’s 3 5/8% senior notes due 2029 (B3/CCC+/CCC+) declined 1½ points to just under 34¼ bid on Friday. Trading reached $4 million in the issue.

The 4¼% senior notes due 2028 (B3/CCC+/CCC+) traded with a 38 bid handle, down more than 1¼ points on the day and more than 5 points softer from the start of the week.

Secondary action was light with $2 million of reported volume.

Lumen’s shares (NYSE: LUMN) closed up 13% to $1.48 in heavy trading.

The Denver-based telecommunications company plans to conduct a debt exchange after reaching an agreement with creditors holding about $7 billion of its debt.

Glatfelter notes gain

Glatfelter’s 4¾% senior notes due 2029 (Caa1/CCC) improved 1 point on more than $5 million of volume in the distressed space on Friday, a source said.

The bonds were quoted at 62¼ bid.

The issue traded Thursday mostly flat in light trading.

CDS spreads in the Charlotte, N.C.-based supplier of engineered materials widened more than 250 bps over the past week ended Wednesday.

CommScope mixed

CommScope Technologies LLC’s 6% senior notes due 2025 (Caa2/CCC-) shifted down ¾ point on Friday to 78 bid, according to a market source.

Trading totaled $3.5 million.

The bonds were about ¼ point better from Monday.

Meanwhile, CommScope, Inc.’s 4¾% senior secured notes due 2029 (B2/CCC+) improved more than ¼ point to 63¼ bid on $5 million of trading on Friday.

The Hickory, N.C.-based network infrastructure manufacturer’s 7 1/8% senior notes due 2028 (Caa2/CCC-) dropped 2½ points during the session to 47 bid in light supply totaling $1.5 million.

November returns up

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns fell on Thursday to 0.16% from 0.61% on Wednesday, 0.3% on Tuesday and 0.38% on Monday.

Month-to-date total returns ended November at 4.1% on Thursday, up from 3.93% on Wednesday, 3.3% on Tuesday and 2.99% at the week’s start.

November returns rebounded from October, which finished with month-to-date total returns at minus 6.17%.

Returns in November were the highest since June, which saw 4.67% of total returns.

Year-to-date distressed total returns moved up to 15.03% on Thursday from 14.85% midweek, 14.15% on Tuesday and 13.81% on Monday.

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