DISH bonds decline; Rite Aid gains after earnings report; Bed Bath & Beyond drops

By Cristal Cody

Tupelo, Miss., April 20 – DISH Network Corp.’s paper came under pressure on Thursday on heavy secondary action.

DISH DBS Corp.’s 5 7/8% senior notes due 2024 (B3/B) have been trading heavily over the past few sessions and neared the top of the list of most active bonds traded on Thursday, sources said.

The notes declined 1½ points over the day on more than $24 million of volume.

Rite Aid Corp.’s notes gained on Thursday, while the drug retailer’s stock dropped nearly 10% after the company reported fiscal-year 2023 fourth-quarter and full-year losses.

Rite Aid’s 8% senior secured notes due 2026 (Caa3/CCC-/CCC) rallied about 2 points on $5.5 million of trading.

Credit default swap spreads widened for both DISH and Rite Aid this week.

Rite Aid’s CDS spreads moved out to more than 6,000 basis points.

Market tone weakened on Thursday and stock indices declined across the board. The S&P 500 index fell 0.6%.

The iShares iBoxx High Yield Corporate Bond ETF softened 7 cents, or 0.09%, to $74.76.

The CBOE Volatility index decreased in the front half of the week but moved up 4.37% on Thursday to 17.18.

Bed Bath & Beyond Inc.’s paper was down more than 1 point with the shorter-dated tranche bearing the brunt of the day’s losses following news reports of an impending Chapter 11 bankruptcy filing, according to a market source.

The 3.749% senior notes due 2024 (C/C) fell 2¼ points.

The distressed retailer’s stock sank 35%.

DISH bonds active

DISH’s 5 7/8% senior notes due 2024 (B3/B) declined 1½ points to 80¾ bid on more than $24 million of volume before recovering some ground to go out down 1 3/8 points at 80 7/8 bid on more than $25 million of trading on Thursday, a source said.

The issue has declined nearly 3 points this week and about 8 points since March.

DISH’s 7 3/8% senior notes due 2028 (B3/B) dropped 2½ points to head out at 51 bid. Trading was lighter at $2.3 million.

The company’s CDS spreads widened 212 bps for the week ended Wednesday to 2,442 bps, according to a Moody’s Investors Service note.

The Englewood, Colo.-based satellite cable operator’s stock slipped 3.83% to $7.53.

Rite Aid bonds gain

Rite Aid’s 8% senior secured notes due 2026 (Caa3/CCC-/CCC) rallied about 2 points to a 50 bid handle on $5.5 million of trading on Thursday, a source said.

Rite Aid reported Thursday a fiscal year 2023 fourth-quarter loss of $241.31 million, down from a loss of $389.06 million in the same period last year.

The company posted a full-year loss of $749.9 million, wider than a loss of $538.47 million in fiscal 2022.

Rite Aid’s CDS spreads eased 155 bps over the past week ended Wednesday to 6,005 bps, according to a Moody’s note.

The Camp Hill, Pa.-based drugstore chain’s stock closed Thursday down 9.7% at $2.14.

Bed Bath & Beyond softens

Bed Bath & Beyond’s paper dropped 1¼ points to 2¼ points on Thursday with the bonds seen among the day’s key distressed decliners, according to a market source.

The 5.165% senior notes due 2044 (C/C) gave back 1¼ points to trade at 5½ bid on $5.4 million of volume.

The 3.749% senior notes due 2024 (C/C) were quoted 2¼ points lower at 8 bid on $4 million of trading.

Bed Bath & Beyond has announced several transactions this year to raise funding, including the issuance of preferred stock warrants.

The company is scheduled to hold a special shareholders meeting on May 9 to vote on a reverse stock split.

The Union, N.J.-based home products retailer’s shares closed down 35.34% at 30 cents on more than triple the average volume.

Distressed returns drop

S&P U.S. High Yield Corporate Distressed Bond index one-day returns dropped midweek to minus 0.34% from 0.32% on Tuesday and minus 0.06% on Monday.

Month-to-date returns decreased to 1.59% on Wednesday versus 1.93% on Tuesday and 1.61% at the week’s start.

Year-to-date total returns fell to 6.18% from 6.54% on Tuesday and 6.2% on Monday.

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