Bausch bonds decline; WeightWatchers paper rallies; Bed Bath & Beyond notes in teens

By Cristal Cody

Tupelo, Miss., March 8 – Bausch Health Cos. Inc.’s notes came under more pressure in strong secondary trading on Wednesday.

The notes slipped about ¼ point to 3 points with the issuer among the most active distressed names on about $21 million of volume, a source said.

WeightWatchers also was a name bandied about on Wednesday on the company’s plans to buy a telehealth provider and its fourth-quarter losses announced Monday, a source said.

The company’s 4½% senior secured notes due 2029 (B1/B) shot up more than 6 points by the close.

S&P Global Ratings said in a report on Wednesday that the company’s announced acquisition “overshadows its weak performance during the fourth quarter.”

Markets were mixed, while volatility was in check as investors brace for an expected 50 basis point rate hike this month following Federal Reserve chairman Jerome Powell’s Congressional testimony on Tuesday.

The iShares iBoxx High Yield Corporate Bond ETF fell 34 cents, or 0.46%, to $73.85.

The CBOE Volatility index was down 2.86% at $19.03.

Bed Bath & Beyond Inc.’s paper was lightly traded on Wednesday after the distressed retailer reported it has received additional proceeds as part of its preferred stock warrants offering in February.

The 5.165% senior notes due 2044 (C/C) remained in the teens trading on around $3 million of volume.

Bausch mostly lower

Bausch Health’s 5% notes due 2028 (Ca/CCC-) fell ¼ point to 43¾ bid in the company’s most active issue seen trading on Wednesday, a market source said.

The bonds were moving on nearly $10 million of volume.

Bausch’s 11% senior secured notes due 2028 (Caa1/CCC+) saw the most decline and were down 3 points at 74½ bid on $5.5 million of secondary trading.

The Laval, Quebec-based pharmaceutical company’s 4 7/8% notes due 2028 (Caa1/CCC+) were mostly flat on Wednesday at around 61 bid on $6.3 million of volume.

WeightWatchers jumps

WeightWatchers' 4½% senior secured notes due 2029 (B1/B) were quoted trading early Wednesday afternoon at 55 offered before moving higher by the close, a source said.

The bonds were last seen more than 6 points better with a 56 bid handle on $4 million of trading.

WW International Inc., formerly known as Weight Watchers International, Inc. until 2019, announced Monday plans to purchase telehealth company Weekend Health Inc. for $132 million.

S&P said in a report Wednesday the acquisition is potentially credit positive over the medium term, while the weight loss company’s fourth-quarter results released Monday were “somewhat below our expectations,” including declines in revenue, end-of-period subscribers and adjusted operating income.

The New York-based company reported Monday a fourth-quarter loss of $32.5 million versus about $30 million of income in the same quarter a year earlier.

Bed Bath & Beyond paper

Bed Bath & Beyond’s 5.165% senior notes due 2044 (C/C) were quoted Wednesday at 13½ bid in mostly light secondary action, a source said.

Trading volume was around $3 million.

Bed Bath & Beyond announced Wednesday the receipt of about $135 million in proceeds, for a total of $360 million through Tuesday, upon exercise of preferred stock warrants issued in its public equity offering in February. In the Feb. 7 offering, the company raised initial gross proceeds of $225 million.

The Union, N.J.-based home products retailer said last week it paid about $25 million in interest payments overdue since Feb. 1 on the 5.165% notes, as well as its 3.749% senior notes due 2024 and 4.915% senior notes due 2034.

Distressed returns soft

S&P U.S. High Yield Corporate Distressed Bond index one-day returns came under pressure on Tuesday to end at minus 0.23%, according to the latest data available.

Returns were down from 0.32% in the same session a week ago.

Month-to-date returns were 0.5% on Tuesday.

Quarterly and year-to-date total returns improved to 9.65% on Tuesday from 9.11% in the week-ago session.

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