Bausch mostly higher; iHeartMedia bonds, CDS spreads weaken; Bed Bath & Beyond active

By Cristal Cody

Tupelo, Miss., May 18 – Bausch Health Cos. Inc. remained a stand-out name in the distressed secondary bond market on Thursday amid heavy trading.

Bausch’s paper mostly climbed a second day after gaining 1½ points to more than 3 points the prior session following a favorable court ruling.

Bausch’s 11% senior secured notes due 2028 (Caa1/CCC+/B), up 2 points on Wednesday, added ¼ point on $12 million of secondary action.

Market tone remained positive a second consecutive session with measured volatility down about 12% since Monday.

The Nasdaq climbed 1.51%.

The iShares iBoxx High Yield Corporate Bond ETF rose 4 cents, or 0.05%, to $74.12.

The CBOE Volatility index fell 4.8% by the close to 16.05.

In other distressed paper, iHeartMedia, Inc.’s bonds and credit default swap spreads have been under pressure this week, sources said.

iHeart’s 6 3/8% senior secured notes due 2026 (B2/BB-) fell ¾ point over the session.

The company’s CDS spreads widened more than 200 basis points this week.

Bankrupt Bed Bath & Beyond Inc.’s 4.915% senior notes due 2034 (C/D) were active over the day on more than $3 million of trading.

Bausch 11% bonds up

Bausch’s bonds continued to trade heavily on Thursday with the company’s 2028 tranches the most active over the session, a source said.

Bausch’s 11% senior secured notes due 2028 (Caa1/CCC+/B), up 2 points on Wednesday, added ¼ point to around 77¾ bid on $12 million of secondary action.

The 4 7/8% senior secured notes due 2028 (Caa1/CCC+/B), which picked up 3 points the previous day, gave back ½ point on Thursday to head out at 62¾ bid on $13 million of volume.

Bausch’s other bonds were trading mostly better in thin activity.

The 5¼% notes due 2031 (Ca/CCC-) rallied around 2¾ points to 44 bid on $1 million of volume.

Bausch announced Wednesday a favorable court ruling from the U.S. District Court of Delaware in a lawsuit against Norwich Pharmaceuticals, Inc.

The Laval, Quebec-based pharmaceutical company’s stock, which closed up 24.09% on Wednesday, added 14.59% on Thursday to $8.56.

iHeartMedia weakens

iHeart’s 6 3/8% senior secured notes due 2026 (B2/BB-) fell ¾ point to 77¼ bid on $3.27 million of trading on Thursday, a source said.

The company’s CDS spreads also widened 229 bps over the past week ended Wednesday to 2,000 bps, according to a Moody’s Investors Service report.

iHeart reported on May 2 a net first-quarter loss of $222.26 million, up from a loss of $48.58 million a year ago.

The media broadcasting company is based in San Antonio.

Bed Bath active

Bed Bath & Beyond’s 4.915% senior notes due 2034 (C/D) were active over the session and quoted at 3 bid and carrying a yield of 134.55%, a source said.

Trading in the bankrupt retailer’s bonds totaled $3.5 million.

The Union, N.J.-based home products retailer filed for Chapter 11 bankruptcy in April and has started liquidation to close all stores.

Distressed index edges up

S&P U.S. High Yield Corporate Distressed Bond one-day returns were modestly better on Wednesday at minus 0.07%, compared to minus 0.09% on Tuesday and minus 0.11% on Monday.

Month-to-date total returns softened further midweek to minus 0.68% from minus 0.61% on Tuesday and minus 0.52% on Monday.

Year-to-date total returns fell to 6.6% in the prior session from 6.67% on Tuesday and 6.77% at the start of the week.

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