DISH bonds drop on ratings downgrade; WW notes rally in second look; Rite Aid higher

By Cristal Cody

Tupelo, Miss., July 26 – DISH Network Corp.’s bonds fell about ¼ point to nearly 1½ points on more than $113 million of paper traded on Wednesday following a downgrade from Moody’s Investors Service, a source said.

The bonds were yielding 11.78% up to 26.76%.

Meanwhile, WW International Inc.’s 4½% senior secured notes due 2029 (B3/B) have rallied about 7 points to 8 points over the last week, a source said.

The notes from the WeightWatchers brand improved further on Wednesday along with its shares after Morgan Stanley raised its recommendation on the equity.

Stocks closed mixed after the Federal Reserve’s rate hike to its highest in more than two decades, while volatility retreated.

The Nasdaq fell 0.12%.

The iShares iBoxx High Yield Corporate Bond ETF rose 30 cents, or 0.4%, to $75.49.

The CBOE Volatility index declined 4.83% to 13.19.

On Wednesday, the Federal Open Market Commission raised the target for short-term interest rates by 25 basis points, setting the target range for the Federal Funds rate at 5¼% to 5½%.

In June, the Fed paused increasing rates and maintained the target range for the Federal Funds rate at 5% to 5¼%.

In a press conference following the rate announcement, Federal Reserve chairman Jerome Powell deferred on future hike plans, noting “We can afford to be a little patient, as well as resolute, as we let this unfold.”

Both the high-grade and high-yield corporate bond markets appear healthy with sectors improved in July, the Federal Reserve Bank of New York reported Wednesday in its Corporate Bond Market Distress index.

Paper from Rite Aid Corp. continued to rebound over the session in strong trading supply totaling more than $11 million.

The 8% senior secured notes due 2026 (Caa3/CCC-/B) added 3/8 point on Wednesday and were up 2 7/8 points this week.

DISH notes decline

DISH DBS Corp.’s 7¾% senior notes due 2026 (Caa2/B-) fell around ½ point to 63 bid and a 26.76% yield on $28.7 million of trading on Wednesday, putting it among the top junk names and most active distressed issue seen, a source said.

DISH’s 5¾% senior secured notes due 2028 (B2/B) dropped nearly 1½ points to 76 bid on $16.99 million of volume over the session.

The 5 1/8% senior notes due 2029 (Caa2/B-) declined 1¼ points to 49 bid on $12.9 million of trading.

Moody’s said Wednesday it lowered the senior ratings to Caa2 from B3 and dropped the secured debt to B2 from Ba3 with the company’s potential for a distressed debt exchange a risk.

The Englewood, Colo.-based satellite cable operator’s stock (Nasdaq: DISH) closed down 6.48% to $7.22.

WW notes better

WW International’s 4½% senior secured notes due 2029 (B3/B) have traded higher in the last few sessions and added more than 2 points on Wednesday, a source said.

The bonds were quoted in the 71 bid to 71½ bid area during the session.

The issue was last seen going out more than 2½ points higher with a 71 bid handle on $13.95 million of volume.

The bonds went from a 63 handle on July 18, the source said.

WW, which operates WeightWatchers, has made changes this year, including in April completing a $132 million acquisition of telehealth company Weekend Health Inc., doing business as Sequence.

The New York-based weight loss company will release its second-quarter earnings results on Aug. 3.

Shares in WW (Nasdaq: WW) climbed 16.21% to $11.54 on Wednesday.

Rite Aid notes up

Rite Aid’s 8% senior secured notes due 2026 (Caa3/CCC-/B) went out up 3/8 point on Wednesday at 50 7/8 bid on $11.2 million of secondary action, a source said.

The bonds improved ½ point on Tuesday and added about 2 points on Monday.

The issue climbed about 4½ points in the prior week.

Rite Aid reported heavy fiscal 2024 first-quarter losses in June.

The Camp Hill, Pa.-based drugstore chain’s stock (NYSE: RAD) finished the day up 1.9% to $1.61 in thin trading.

Distressed index flat

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns held steady on Tuesday at 0.18%, unchanged from Monday.

Month-to-date total returns improved on Tuesday to 2.34% versus 2.16% at the start of the week.

Year-to-date distressed total returns increased to 14.24% in the prior session from 14.04% on Monday.

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