Qurate, QVC paper moves lower; Community Health Systems mixed following downgrades

By Cristal Cody

Tupelo, Miss., March 2 – Bonds from QVC Inc. and parent Qurate Retail Inc. continued to mostly soften on Thursday following the release of a weak earnings report.

QVC’s 4.45% senior secured notes due 2025 (Ba3/B+) traded down 1¾ points on nearly $15 million of volume as one of the most active distressed names seen during the session, a source said.

Qurate Retail’s 8½% senior debentures due 2029 (B3/CCC) slid to a handle in the 30s during the session after shedding 5 points on Wednesday.

“Only two issues have traded – the 29s and the 30s,” a source said. “The 29s were down 2 points.”

Community Health Systems Inc.’s paper was mixed in light trading following downgrades from Moody’s Investors Service and S&P Global Ratings, a source said.

The 6 7/8% senior notes due 2029 (Caa2/CCC) rose ½ point on $4 million of volume.

While the day saw fairly positive gains as volatility waned, market activity was lighter.

The iShares iBoxx High Yield Corporate Bond ETF rose 7 cents, or 0.1%, to $73.94 on less-than-average volume.

The CBOE Volatility index moved back below a 20 handle and went out down about 5% at $19.58.

“It was a little bit slow,” a trader said.

QVC, parent down

Qurate Retail’s 8½% senior debentures due 2029 (B3/CCC) sank 3 points to trade with a 38 bid handle on $6.7 million of volume on Thursday, a source said.

On Wednesday, the bonds dropped 5 points to 40¾ bid.

Qurate Retail’s 8¼% notes due 2030 (B3/CCC) were quoted up nearly 3 points at 39 bid on $7 million of supply on Thursday before the issue was later seen down 1 point at 37 bid on about $9 million of trading.

Paper from subsidiary QVC also continued to decline on Thursday.

QVC’s 4.45% senior secured notes due 2025 (Ba3/B+) traded down 1¾ points to 76¼ bid on $14.9 million of volume, a source said.

The 4 3/8% senior secured notes due 2028 (Ba3/B+) also were active but flat at 52 bid on $7 million of volume.

The bonds have been down in back-to-back sessions after the West Chester, Pa.-based media company, formerly known as Liberty Interactive Corp., reported Wednesday fourth-quarter and fiscal 2022 losses.

For the week ended Wednesday, Liberty Interactive credit default swap spreads moved out 413 basis points to 3,025 bps, according to a Moody’s report.

Community Health up

Community Health’s 6 7/8% senior notes due 2029 (Caa2/CCC) rose ½ point to 71½ bid on $4 million of volume on Thursday, a market source said.

S&P said Thursday it dropped the issuer to SD from B- and the junior-priority secured notes due in 2029 and 2030 to D from CCC following the company’s recent repurchases of about $597 million of the notes in distressed transactions paying an average of approximately 54 cents on the dollar.

S&P said it is the fourth time since 2018 it has lowered the company’s rating to SD.

Moody’s said Wednesday it downgraded the company and senior notes to reflect a major increase in the issuer’s financial leverage and uncertainty on its ability to generate positive free cash flow.

On Tuesday, Community Health Systems announced a definitive agreement to sell two hospitals in North Carolina to subsidiaries of Novant Health for approximately $320 million in cash.

The Franklin, Tenn.-based operator of acute care and outpatient facilities announced in January that it completed the divesture of a 122-bed medical center in West Virginia.

Distressed index softens

S&P U.S. High Yield Corporate Distressed Bond index one-day returns dropped to minus 0.3% on Wednesday from 0.32% on Tuesday and 0.54% at the start of the week.

Month-to-date returns equaled minus 0.3% in the first session of March. February U.S. High Yield Corporate Distressed Bond index returns ended Tuesday at 1.03%.

Quarterly and year-to-date total returns were 8.77% midweek versus 9.11% on Tuesday and 8.76% on Monday.

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