National CineMedia bonds, loans weak; Bed Bath & Beyond notes lower; CHS paper softens

By Cristal Cody

Tupelo, Miss., Oct. 31 – Cinema advertising company National CineMedia, LLC’s paper remains weak since the company missed $11 million of coupon payments earlier in October.

National CineMedia’s 5¾% senior notes due 2026 (Ca/CC) traded more than 1¼ points softer on Monday but were moving more than 2 points higher from a week ago.

National CineMedia’s term loan is bid in the 40s after the company missed an interest payment due Oct. 15, according to a Fitch Ratings report on Monday.

Bed Bath & Beyond Inc.’s paper softened about ½ point to ¾ point over Monday’s session following the retailer’s announcement on Friday of plans to sell additional stock.

The 5.165% senior notes due 2044 (C/CC) went out about ¾ point lower.

CHS/Community Health Systems, Inc.’s 4¾% notes due 2031 (B2/B) also declined 2¼ points in strong selling pressure on Monday but continued to hold onto most of last week’s gains.

Market tone kicked off the week and the last day of October softer.

The iShares iBoxx High Yield Corporate Bond ETF slid $1.12, or 1½%, to $73.43.

Measured market volatility was only marginally higher with the CBOE Volatility index up 0.66% to 25.92 by late afternoon.

In other distressed market action, Moody’s Investors Service said in a report on Friday that U.S. corporate defaults eased in the third quarter but are expected to increase year over year.

The 12-month trailing default rate for U.S. non-financial corporates was 1½% at the end of September, down from 2½% a year ago and slightly up from 1.4% in the prior quarter, Moody’s said.

The agency forecasts that defaults will triple to 4.8% – exceeding the 4.7% long-term average for the first time since May 2021.

The number of defaults fell to four in the third quarter from eight in the prior quarter, and all defaults were bankruptcy filings with more than half from loan-only issuers, Moody’s said.

Third quarter rated defaults came from Endo International Inc., Carestream Health, Inc., Output Services Group, Inc. and Phoenix Services International LLC.

CineMedia declines

National CineMedia’s 5¾% senior notes due 2026 (Ca/CC) traded more than 1¼ points softer on Monday but were moving more than 2 points higher from a week ago, a source said.

The notes were quoted at 9¾ bid by the close, up from the 7 bid to 7¼ bid area seen in the same session last week.

National CineMedia’s term loan is bid in the 40s after the company missed a bond interest payment on its $374.2 million of 5 7/8% senior secured notes due 2028 that was due on Oct. 15, according to a Fitch report on Monday.

The Centennial, Colo.-based cinema advertising company is in a 30-day grace period.

Bed Bath & Beyond down

Bed Bath & Beyond’s notes moved lower on Monday following the retailer’s latest announcement on Friday of plans to sell additional stock, a market source said.

The 3.749% senior notes due 2024 (C/CC) softened ½ point from Friday to 21 bid.

Bed Bath & Beyond’s 5.165% senior notes due 2044 (C/CC) went out about ¾ point lower at 10¾ bid.

The company on Friday announced plans to sell up to $150 million of additional shares under its at-the-market offering program.

The retailer announced earlier in October offers to exchange the senior notes for new second-lien and third-lien debt.

The Union, N.J.-based home products retailer also is in the midst of a search for a chief executive and strategic changes that include closing stores.

CHS notes give back

CHS/Community Health’s 4¾% notes due 2031 (B2/B) declined in strong selling pressure on Monday on about $9.7 million of paper traded but continued to hold onto last week’s gains, a source said.

The notes fell 2¼ points to near the 66¼ bid area.

The issue had climbed 3 points to hit 65¼ bid on Thursday on $40 million of paper traded.

CHS’ paper climbed in the back half of last week after the Franklin, Tenn.-based operator of acute care and outpatient facilities on Wednesday reported heavy third-quarter losses.

Distressed returns higher

S&P U.S. High Yield Corporate Distressed Bond index one-day returns remained positive on Friday at 0.43%, compared to 0.7% on Thursday, 0.67% on Wednesday, 0.18% on Tuesday and 0.01% at the start of the week.

Month-to-date total returns rose to 0.59% on Friday from 0.15% on Thursday, minus 0.54% on Wednesday, minus 1.2% on Tuesday and minus 1.38% at the week’s start.

Year-to-date total return ended Friday at minus 25.78% compared to minus 26.1% on Thursday, minus 26.61% on Wednesday, minus 27.1% on Tuesday and minus 27.23% in the Oct. 24 session.

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