Rite Aid paper limps back at week’s start; Altice bonds soften; Bausch Health improves

By Cristal Cody

Tupelo, Miss., July 17 – Rite Aid Corp.’s 8% senior secured notes due 2026 (Caa3/CCC-/B) traded Monday ½ point better but remain down about 3 points or more since declining after the release of the company’s 10-Q regulatory filing.

The bonds went into the weekend mostly flat.

Market tone was positive as the week kicked off, though volatility creeped higher.

Stock indices all rose. The Nasdaq added 0.93%.

The iShares iBoxx High Yield Corporate Bond ETF improved 14 cents, or 0.19%, to $75.24.

The CBOE Volatility index increased 1.05% to 13.48.

Some distressed issues were more prominent on Monday, according to a market source.

Altice Financing SA’s 5% notes due 2028 slid 3 points on Monday with the company’s co-founder facing corruption charges and parent Altice USA, Inc.’s chairman resigning from the board.

Bausch Health Cos. Inc.’s 8½% senior secured notes due 2027 (Caa1/CCC+/B) were up ¼ point over the morning and held on to the gain by the close.

Rite Aid improves

Rite Aid’s 8% senior secured notes due 2026 (Caa3/CCC-/B) traded ½ point better on Monday at 44¼ bid, according to a market source.

The notes were seen on Friday mostly unchanged at 43 bid, 44 offered after trading as low as 39½ bid, 40½ offered on Wednesday.

Rite Aid’s paper slid last week following the company’s 10-Q filing.

In the same session a week ago, the 8% bonds traded at 47 bid, 48 offered.

Rite Aid’s credit default swap spreads also moved out more than 2,700 basis points in the prior week.

The Camp Hill, Pa.-based drugstore chain’s stock (NYSE: RAD) dropped 1.95% on Monday to $1.51.

Altice declines

Altice Financing’s 5% senior secured notes due 2028 (B3/B) slid 3 points in trading on Monday to 76¼ bid, a market source reported.

Parent company Altice USA, Inc.’s stock (NYSE: ATUS) also fell 3.62% to $2.93 over the session.

The New York-based broadband communications provider underwent a shakeup over the weekend.

News reports emerged Friday that Altice co-founder Armando Pereira was detained on tax fraud and money laundering suspicions in Portugal, while on Sunday Altice USA chairman Alexandre Fonseca resigned from the board and was replaced by chief executive officer Dennis Mathew.

Bausch higher

Bausch Health Americas, Inc.’s 8½% senior secured notes due 2027 (Caa1/CCC+/B) went out ¼ point better on Monday at 58¼ bid, a source said.

The notes are up 3 points since the start of July.

The company’s paper has been on the upswing following company announcements, including that a subsidiary entered into a $600 million five-year revolving credit facility with investment firm KKR and subsidiary Bausch + Lomb Corp. taking on two acquisitions.

Bausch will report second-quarter results on Aug. 3.

The Laval, Quebec-based pharmaceutical company’s stock (NYSE: BHC) rallied 10.2% to close Monday at $9.29.

Distressed index dips

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns finished the prior week lower on Friday at 0.16%, down from 0.95% on Thursday, 0.52% on Wednesday and 0.55% on Tuesday and marginally up from 0.15% at the week’s start.

Month-to-date total returns rose improved on Friday to 2.13%, compared to 1.96% on Thursday, 1% on Wednesday, 0.48% on Tuesday and 0.07% at the start of the prior week.

Year-to-date distressed total returns climbed to 14% at the close of the previous week from 13.82% on Thursday, 12.75% on Wednesday, 12.17% on Tuesday and 11.55% in the week’s first session.

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