Rite Aid notes, CDS soften; Qurate declines; Staples lower; higher default rate eyed

By Cristal Cody

Tupelo, Miss., May 18 – Rite Aid Corp.’s paper remained soft after a downgrade on Thursday from S&P Global Ratings, while its credit default swap spreads also widened a second consecutive week.

Rite Aid’s 8% senior secured notes due 2026 (B3/CCC-/BB-) fell 1 5/8 points to 75 3/8 bid, a source said.

The drugstore chain’s CDS spreads also moved out 385 basis points in the past week ended Wednesday to 3,351 bps, according to a market source.

Qurate Retail Inc.’s notes and CDS spreads also remained under pressure, sources said.

Subsidiary Liberty Interactive LLC’s 8½% senior debentures due 2029 (B2/B) declined about 1¼ points to the 76½ bid area over the day.

Liberty Interactive’s CDS spreads eased 106 bps to 1,241 bps over the past week ended Wednesday.

The company’s CDS spreads widened over 300 bps in the prior week.

Also trading lower on Thursday, Staples Inc.’s 10¾% senior notes due 2027 declined 2½ points to 73½ bid, a market source said.

Trading was steady with $10 million of volume.

The company’s CDS spreads widened nearly 500 bps over the past week.

Meanwhile Thursday, S&P reported the U.S. trailing-12-month speculative-grade corporate default rate could reach 3% by March 2023, up from 1.4% in March 2022, on growing risks and higher interest rates.

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