DISH notes higher; Carvana trading thins; First Republic gains; QVC up; Qurate declines

By Cristal Cody

Tupelo, Miss., March 31 – DISH Network Corp.’s paper continued to gain on Friday with the distressed bonds trading about 1 point to 2 points better.

DISH's 5 7/8% senior notes due 2024 (B3/B) added 2 points on $36.95 million of volume after picking up 3 points on Thursday and 4 points on Wednesday.

Overall trading was stronger in higher-rated junk issues in Friday’s session, which marked the end of the first quarter, sources reported.

Carvana Co.’s paper was thinly traded with its 5 7/8% senior notes due 2028 (Ca/C) racking up less than $1 million of secondary action on Friday, a source said. The issue was up nearly 3½ points at the 44¾ bid range.

The bonds improved 1½ points on more than $15 million of trading on Thursday.

Stocks rallied into the close on Friday with indices closing as high as 1.74% higher. The S&P 500 index finished up 1.44%.

The iShares iBoxx High Yield Corporate Bond ETF added 84, or 1.12%, to $75.58.

The CBOE Volatility index retreated slightly by 1.37% to 18.76 by the close.

Financial paper was ending the week after a volcanic March mostly better with Deutsche Bank, First Republic Bank, Barclays, Morgan Stanley and Lloyds Banking Group plc all higher in the secondary market, a source said.

First Republic Bank’s notes were nearly 2 points to more than 3½ points better.

The bank’s 4 3/8% subordinated notes due 2046 (B2/B-) were trading about 5 points better on the week.

Credit spreads have remained elevated, with high-grade up 20 basis points and high yield up 90 bps from before the “banking shock,” according to a BNP Paribas research note released Friday.

BNP added that it has revised its Fed Funds forecast 50 bps lower to hit 5¼% by July.

“This implies one more 25 bp hike, which we expect to come at the May policy meeting,” the note said.

March ended with two fallen angels, the first seen since Kohl’s Corp.’s drop in December, after Nissan Motor Co. and First Republic Bank both were dropped to junk.

The financial space saw other fallen angels last year, including Pacific Western Bank in August 2022, according to a BofA Securities research note on Friday.

Year-to-date defaults have totaled $7 billion from three issuers, including Party City Holdings Inc. in January and Avaya Inc. in February, BofA said.

Retail issuers make up a chunk of a long list of default candidates that “adds up to our 4.1% next-12m default projection,” according to the note.

Home shopping network QVC Inc.’s distressed paper turned better on Friday in steady trading action, while parent Qurate Retail Inc.’s notes declined.

QVC’s 5.45% notes due 2034 (B2/B-) improved more than 2 points to the 37 bid area on more than $10 million of volume.

DISH bonds up

DISH’s bonds were on an extended run higher on Friday with the notes about 1 point to 2 points better after adding about 1¼ points to more than 3 points on Thursday, a market source said.

DISH’s 5 7/8% senior notes due 2024 (B3/B) traded 2 points higher at 89 bid on $36.95 million of volume.

The bonds climbed 3 points on Thursday on $23.5 million of volume and rallied 4 points on Wednesday on $27.95 million of secondary activity.

DISH’s 5¼% notes due 2026 (Ba3/B+) were more than 1 point better at the 79½ bid area on $18.7 million of trading on Friday.

On Thursday, the issue traded over 2 points better on $16.3 million of supply and went out Wednesday up nearly 1½ points on $31 million of trading.

The company’s 7¾% notes due 2026 (B3/B) also were up 1¼ points at 66 bid on $8.6 million of activity Friday.

DISH’s 7¾% tranche improved about 3½ points on Thursday on over $14 million of volume.

The Englewood, Colo.-based satellite cable operator’s stock closed the day 3.55% stronger at $9.33.

First Republic improves

First Republic Bank’s 4 3/8% subordinated notes due 2046 (B2/B-) rallied 3 7/8 points to 55 bid on $11.8 million of trading volume on Friday, a source said.

The bank’s other tranche of subordinated notes, the 4 5/8% subordinated notes due 2047 (B2/B-), was quoted at 55¼ bid, nearly 2 points higher on the day on more than $16 million of trading.

Both tranches were ending the week about 5 points stronger.

The bank was dropped to junk in March and received a lifeline when 11 major banks announced on March 16 that they would make $30 billion of deposits into First Republic.

The San Francisco-based bank’s stock finished the session 2.19% higher at $13.99, but well off its 52-week high range of $171.09.

QVC, Qurate mixed

QVC’s 5.45% notes due 2034 (B2/B-) improved more than 2 points to the 37 bid area on more than $10 million of secondary supply on Friday, according to a market source.

The shopping network’s 4 3/8% notes due 2028 (B2/B-) rallied over 3 points to the 40 bid range on $7.9 million of trading during the session.

Meanwhile, parent Qurate Retail’s 8¼% senior notes due 2030 (Caa2/CCC-) dropped 1½ points to 23½ bid by late afternoon on $4.2 million of volume.

The West Chester, Pa.-based company’s shares shed 7.62% on Friday to close at 80 cents.

Distressed returns positive

S&P U.S. High Yield Corporate Distressed Bond index one-day returns remained positive on Thursday at 0.45%, down slightly from 0.48% on Wednesday.

Returns were improved from minus 0.44% on Tuesday and 0.37% on Monday.

Month-to-date returns were minus 5.06% on Thursday, minus 5.49% on Wednesday, minus 5.94% on Tuesday and minus 5.53% on Monday.

Quarterly and year-to-date total returns ended Thursday at 3.58% versus 3.12% on Wednesday, 2.62% on Tuesday and 3.07% at the week’s start.

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