Altice France senior bonds gain; Spirit Airlines secured notes up from January losses

By Cristal Cody

Tupelo, Miss., April 9 – Altice France Holding Restricted Group’s securities continued to dominate the distressed secondary space on Tuesday with the bonds pulling in over $50 million of trading.

The 10½% senior notes due 2027 (Ca/CCC-) climbed 1½ points after adding 2 points on Monday but remained firmly entrenched in the distressed space on a handle in the low 40s.

Spirit Airlines Inc.’s 8% senior secured notes due 2025 (Caa2//BB-) stood out with the paper trading around ¾ point to nearly 2 points higher on about $10 million of bonds changing hands.

The issue was quoted with a handle in the high 70s, a comeback after sinking to the 40s following a January court ruling against its $3.8 billion merger with JetBlue Airways Corp.

Market tone was mixed as traders hedged ahead of March inflation data due out Wednesday.

The S&P 500 index rose 0.14%, while the Dow Jones industrial average closed off 0.02%.

The iShares iBoxx High Yield Corporate Bond ETF rose 16 cents, or 0.21%, to $77.16.

The CBOE Volatility index was down more than 1% and back below a 15 handle at 14.98.

Treasury yields had climbed on Monday to their highest since November with the benchmark 10-year note yield at 4.42% but retreated 5 basis points over the session to 4.36%.

The higher yields early Tuesday were “enticing some investors to buy bonds again, pulling yields a bit lower,” according to a Confluence Investment Management note.

Altice paper mixed

One of the biggest gainers in the distressed space on Tuesday was Altice France Holding SA’s 10½% senior notes due 2027 (Ca/CCC-), which rose 1½ points to 42½ bid on $22 million of volume, a source said.

The bonds added 2 points in the prior session and gained more than 6 points over the past week.

Altice France’s notes still remain down from trading around 70½ bid, 71½ offered in March before the company lowered its guidance and highlighted potential haircuts for debt holders to reduce its leverage.

The 6% senior notes due 2028 (Ca/CCC-) also improved on Tuesday and climbed 1 1/8 points to 32¾ bid on $10 million of volume.

Meanwhile, Altice France SA’s 5 1/8% senior secured notes due 2029 (Caa1/CCC+) gave back Monday’s ½ point gain to head out at 68½ bid on $10 million of activity.

The Paris-based telecommunications company’s 5½% senior secured notes due 2028 (Caa1/CCC+) also were down ½ point to a quote of 70½ bid in light supply.

Spirit notes trade

Spirit Airlines’ 8% senior secured notes due 2025 (Caa2//BB-) were changing hands on Tuesday at around ¾ point to nearly 2 points higher in the 78 to 79 bid range on about $10 million of secondary action, a source reported.

The bonds were last seen over 1¾ points better at 79 bid on $8 million of trading.

The issue has climbed from dropping to 47½ bid, 48½ offered in January after a federal court ruling ended Spirit Airlines’ mergers with JetBlue.

Spirit announced in March that JetBlue will pay it a $69 million merger termination fee.

The company said it is focused on returning to profitability, including looking at options to refinance its bonds.

The 8% notes have $1.1 billion outstanding.

On Monday, Spirit Airlines announced it expects to improve liquidity by $340 million over the next two years after the company reached an agreement with Airbus to defer all ordered aircraft scheduled to be delivered in the second quarter of 2025 through 2026 and from 2030 through 2031.

The company also plans to furlough approximately 260 pilots effective Sept. 1.

The Miramar, Fla.-based low-cost airline has retained Perella Weinberg & Partners LP and Davis Polk & Wardwell LLP as advisers.

Distressed returns move up

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns kicked the week off higher at 0.58% after closing Friday at minus 0.32% and coming in at negative 0.39% in the same session a week ago.

Month-to-date total return losses narrowed on Monday to minus 0.68% from minus 1¼% on Friday and negative 0.39% in the week-ago session.

Year-to-date total returns jumped to 1.44% as the week opened from 0.85% ahead of the weekend but remained down from 1.73% of returns in the same day last week.

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