Altice soft on week with paper central in distressed market; secondary trading ‘busier’

By Cristal Cody

Tupelo, Miss., April 18 – Altice France Holding Restricted Group continued to dominate secondary action in the distressed market on Thursday with the name attracting more than $70 million of volume across six bonds, a chunk of the $200 million overall supply reported during the session.

Altice’s paper was mixed but mostly around 1/8 point to nearly 1½ points higher.

The 10½% senior notes due 2027 (Ca/CCC-) picked up 1 point but have declined about 2½ points this week.

Overall distressed trading supply ramped up from $170 million in the prior session, $180 million on Tuesday and $171 million on Monday.

“It is on the busier end of the range,” a trader said. “Yields are up. People are focused on new issues.”

Distressed bonds overall were seen mostly lower by the end of the day, including paper from Bausch Health Cos. Inc.

Bausch’s 11% senior secured notes due 2028 (Caa1/CCC+/B) fell ½ point following a ratings upgrade after it staved off a patent drug challenge.

Treasury yields turned higher, pushing the benchmark 10-year note yield up 6 basis points to 4.65%.

Stock indices ended mixed with the junk space slightly improved following strong economic data.

The S&P 500 closed off 0.22%, while the iShares iBoxx High Yield Corporate Bond ETF rose 6 cents to $75.84.

Market volatility was little changed. The CBOE Volatility index fell 1.15% to 18.

The Labor Department reported initial unemployment claims for the week ended April 13 were a seasonally adjusted 212,000, flat from the prior week’s revised level and below 215,000 expected by economists.

Also, the Philadelphia Federal Reserve Bank reported its Philadelphia FRB Manufacturing Activity Index climbed to a seasonally adjusted level of 15.5 in April, much higher than the forecasted 2.0 reading and the March level of 3.2.

Altice active

Altice’s paper remained lower on the week on Thursday but edged up during the session, a source reported.

Altice France Holding SA’s 10½% senior notes due 2027 (Ca/CCC-) recovered 1 point on $11 million of volume.

The notes were quoted at 39¼ bid, down from 41¾ bid in the same session last week.

Altice France SA’s 5 1/8% senior secured notes due 2029 (Caa1/CCC+) added 1/8 point to 64 5/8 bid in the company’s most traded tranche on $18 million of supply on Thursday.

Altice France’s 8 1/8% senior secured notes due 2027 (Caa1/CCC+) remained pressured and declined just under 1 point to 74½ bid over the day. Volume totaled $17 million.

The secured notes have softened from trading at 79 1/8 bid in the same session a week earlier.

The Paris-based telecommunications company’s bonds plunged in March and remain pressured with Altice France reportedly undergoing debt negotiation talks.

Bausch mostly lower

Bausch Health’s notes traded mostly lower across its tranches on around $25 million of secondary action by the end of the session, sources said.

Bausch’s 11% senior secured notes due 2028 (Caa1/B-/B) fell ½ point to 75¾ bid on $9 million of supply.

The bonds have declined from where the issue was quoted in the same session a week ago at 77½ bid.

The 6 1/8% senior secured notes due 2028 (Caa1/B-/B) also slipped ¼ point on Thursday to 71½ bid on $6 million of activity.

Bausch’s notes traded at 73¾ bid in the week-ago session.

Over the day, Bausch’s 5¼% senior notes due 2030 (Ca/CCC/C) were the standout and traded 1/8 point better at 43¼ bid on $6 million of volume.

S&P Global Ratings said Thursday it upgraded the secured and senior notes after the company won an appeals decision in the U.S. Court of Appeals for the Federal Circuit on April 11 in its lawsuit to prevent near-term generic production of its Xifaxan drug.

The ruling also makes the company’s plan to spin off subsidiary Bausch + Lomb Corp. more likely and lowers the chances of a below-par debt exchange still possible due to Bausch’s distressed trading levels, S&P said.

“The longer-dated unsecured notes continue to trade at 40-70 cents on the dollar (yielding 18%-26%), which we view as highly distressed,” S&P said. “We think Bausch Health still could look to capture this significant discount ahead of its upcoming maturities, especially if the spinoff is completed. We would likely view any debt repurchases or exchanges on the distressed debt as tantamount to a default.”

The Laval, Quebec-based global pharmaceutical company also faces a securities class action lawsuit over alleged violations of federal securities laws.

April distressed index

S&P U.S. High Yield Corporate Distressed Bond index one-day total return losses came in midweek to minus 0.36% after sinking to negative 1¼% on Tuesday and were improved from minus 0.52% on Monday.

Month-to-date total returns fell to negative 3.34% on Wednesday versus negative 2.99% on Tuesday and negative 1.76% at the week’s start.

Year-to-date total returns dropped to minus 1.28% midweek, compared to 0.92% on Tuesday and 0.34% on Monday.

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