Talen, W&T Offshore bonds decline; Moss Creek, Nabors gain; Hertz, AMC notes improve

By Cristal Cody

Tupelo, Miss., March 1 – Energy bonds remained mixed in distressed secondary trading on Monday as oil prices slipped.

Talen Energy Supply LLC’s 6½% senior notes due 2025 (B3/CCC+/B) fell 3 points to trade at 85 bid going out, a source said.

Oil and natural gas producer W&T Offshore, Inc.’s 9¾% senior secured second-lien notes due 2023 (Caa3/B) softened 1/8 point to 82½ bid, the source said.

The company will release fourth-quarter and 2020 earnings results on Wednesday.

Oil and gas exploration company Moss Creek Resources Holdings Inc.’s 7½% senior notes due 2026 (Caa2/B-) recovered ¼ point after softening Friday to trade at 83½ bid, a market source said.

Nabors Industries Inc.’s bonds traded about ¾ point to 1 point better on the day, according to a market source.

The oil and gas drilling contractor’s 5¾% senior notes due 2025 (Caa2/CCC-) were quoted up ¾ point at 80½ bid.

Oil futures were mixed on Monday ahead of an OPEC meeting scheduled for Thursday.

West Texas intermediate crude oil for April deliveries fell 86 cents to settle the day at $60.64 a barrel.

North Sea Brent crude oil futures for April deliveries settled unchanged for a second session at $66.88 a barrel, while May deliveries fell 73 cents to settle at $63.69 a barrel.

Overall market tone was better on Monday after weaker sessions on Thursday and Friday as major stock indices closed higher.

The iShares iBoxx High Yield Corporate Bond ETF recovered 97 cents, or 1.12%, to close Monday at $87.10.

The S&P U.S. High Yield Corporate Distressed Bond index ended Friday down 0.18% but with a 5.16% month-to-date total return and a year-to-date total return of 14.02%.

Diamond Sports stable

Meanwhile, Diamond Sports Group LLC’s bonds steadied on Monday after sinking last week following reports that the company is considering a distressed debt exchange or redemption, a market source said.

Diamond Sports Group’s 6 5/8% senior notes due 2027 (B3/CCC-) were flat at 52 bid after heading out Friday more than 5 points softer on the week.

Parent company Sinclair Broadcast Group, Inc. reported soft 2021 guidance for Diamond Sports Group on Wednesday and said it remains interested in liability management initiatives, which could include a debt exchange or redemption.

S&P Global Ratings said in a news release on Wednesday that it would view such actions as tantamount to a default and that it views Diamond Sports’ capital structure as unsustainable.

Hertz notes stronger

Bankrupt car rental company Hertz Corp.’s 5½% notes due 2024 gained in heavy trading over the day, from 77½ bid to 84 bid by late afternoon, according to a market source.

The notes headed out on Friday at 77¼ bid.

Hertz’s 5½ notes have climbed more than 14 points from where the issue traded a month ago.

AMC trades up

In other distressed secondary trading, movie theater owner AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) rose 2 points to 79½ bid by late Monday afternoon, a market source said.

The notes recovered after softening 2½ points on Friday and remain stronger than where the issue started the year at 27 bid.

AMC’s notes have mostly rallied this year after the company raised additional funding in January and ahead of New York City’s upcoming reopening of theaters on Friday.

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