Endo notes mixed on more missed bond payments; Bausch paper improves; Community Health up

By Cristal Cody

Tupelo, Miss., July 15 – Endo International plc’s paper traded mostly higher in thin secondary action Friday following the company’s announcement of two more missed bond interest payments.

The unsecured notes were ¼ point higher, while the secured paper traded flat to 1 point higher.

Another pharmaceutical name saw an upturn over the session.

Bausch Health Cos. Inc.’s bonds climbed about 2¾ points to more than 5 points on more than $14 million of secondary volume after treading lower over most of the week, a source said.

“The market was down over the week, and today it moved up, up, up,” a source said. “Some names traded up 2 points.”

After swimming in red most of the week, stocks turned positive Friday with the S&P 500 index up 1.92% and the Nasdaq 1.79% better by the close.

The iShares iBoxx High Yield Corporate Bond ETF climbed 1.27%, or 95 cents, to $75.50.

Market volatility also receded with the CBOE Volatility Index down 8.22% at 24.23 by late afternoon.

Overall distressed trading action was light Friday with Bausch one of the more active names, sources said.

In the distressed health care space, Community Health Systems Inc.’s 6 1/8% senior secured notes due 2030 (Caa2/CCC) climbed about 1¼ points by the close but ended the week mostly unchanged in thin trading.

Endo bonds mixed

Endo’s bonds went out mostly higher in light trading Friday but were down on the week by about ¼ point to 1 5/8 points, a source said.

Endo Finance LLC’s 6% senior notes due 2028 (Caa3/C) traded nearly ¼ point higher in thin supply near the 9 bid area.

Endo Luxembourg Finance Co. Sarl’s 6 1/8% senior secured first-lien notes due 2029 (Caa2/CC) were 1 point higher at 78 bid by the close.

Endo subsidiary Par Pharmaceutical Inc.’s 7½% senior secured notes due 2027 (Caa2/CC) went out flat at 77½ bid.

Endo reported Friday in an 8-K filing with the Securities and Exchange Commission that it elected not to pay $1.9 million of interest payments due on its 5 3/8% senior notes due 2023 and its 6% senior notes due 2023.

The company has a 30-day grace period before a default is declared.

Endo said the missed payments were not driven by liquidity constraints since it had approximately $1.4 billion in cash as of March 31.

The Dublin-based pharmaceuticals company already has been in a 30-day grace period after announcing June 30 that it missed a $38 million interest payment on its 6% senior notes due 2028.

Bausch Health improves

Bausch Health’s senior notes due 2029 (B3/B-/B) climbed about 2¾ points to more than 5 points higher on Friday after declining over the most of the week, a source said.

The company’s 5% senior notes due 2029 jumped 3½ points to head out at 48½ bid.

Bausch’s 5¼% senior notes due 2031 recovered 1¼ points to a quote of 45¾ bid by the day’s end.

Bausch Health Americas, Inc.’s 8½% senior notes due 2027 also were about 1¾ points better at the 66 bid range over the afternoon.

The Laval, Quebec-based pharmaceutical company’s bonds were ending the week about 4 points to 6 points softer.

CHS notes higher

Meanwhile, CHS/Community Health Systems, Inc.’s 6 1/8% senior secured notes due 2030 (Caa2/CCC) rose about 1¼ points in thin trading Friday but were mostly unchanged on the week, according to a market source.

The bonds went out at the 56½ bid area.

The Franklin, Tenn.-based operator of acute care and outpatient facilities’ 6 7/8% senior notes due 2029 (Caa2/CCC) were ending the week about 1¾ points lower.

The issue was quiet Friday after declining about 1¼ points to the 58¼ bid area on Thursday.

Distressed returns drop

The S&P U.S. High Yield Corporate Distressed Bond Index turned weaker on Thursday.

One-day total returns dropped to minus 1.12%, compared to minus 0.44% on Wednesday, minus 0.45% on Tuesday and minus 0.08% on Monday.

Month-to-date total returns also declined to minus 2.59% from minus 1.49% on Wednesday, minus 1.05% on Tuesday and minus 0.6% at the start of the week.

Year-to-date total returns fell to minus 24.63% on Thursday from minus 23.77% in Wednesday’s session, minus 23.44% on Tuesday and minus 23.09% on Monday.

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