Rite Aid climbs; distressed space expands in October; AMC steady on lawsuit wrap

By Cristal Cody

Tupelo, Miss., Oct. 17 – Secondary trading ramped up on Tuesday in Rite Aid Corp.’s bonds in the session after the company announced its weekend Chapter 11 bankruptcy filing.

Rite Aid’s 8% senior secured notes due 2026 (Caa3/D/B) went out about 5 points better at 67½ bid on more than $24 million of notes traded, market sources said.

Default volume year to date through Monday totaled $33.6 billion from 30 issuers, significantly higher than the $20.2 billion from 13 issuers in the same period last year, according to a report from Fitch Ratings.

The U.S. high-yield TTM default rate stands at 2.5% by volume and 2.8% by issuer count in September, in line with August, Fitch said.

More defaults are expected over the fourth quarter.

WeWork Inc. and Audacy, Inc. both missed or elected not to pay interest payments due Oct. 2 and are currently in grace periods, Fitch noted.

Elsewhere in the secondary market, AMC Entertainment Holdings, Inc.’s bonds were little changed after the company reported a preliminary settlement in a stockholder derivative lawsuit.

AMC’s 7½% senior secured first-lien notes due 2029 (Caa1/B-) declined more than ¼ point to 71 7/8 bid on about $8 million of activity, a source said.

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