Diamond Sports, Intelsat Jackson bonds decline; Hertz, Frontier, AMC gain; PBF improves

By Cristal Cody

Tupelo, Miss., March 8 – Diamond Sports Group LLC’s bonds remained mostly weak on Monday in distressed secondary trading with the issuer’s notes downgraded by Moody’s Investors Service.

The company’s 5 3/8% senior secured notes due 2026 (B2/CCC+) traded as low as 65¾ bid over the day before heading out flat from Friday at 68 bid, a source said.

The notes have declined about 10 points since parent company Sinclair Broadcast Group, Inc. reported in February soft guidance for the sports broadcast group.

Sinclair also announced that it remains interested in liability management initiatives that could include a debt exchange or redemption.

On Monday, Moody’s downgraded the company’s secured notes rating to B2 from Ba3 and its senior notes rating to Caa2 from B3, citing high leverage over at least the next 12 months and a negative outlook over uncertainty surrounding renewing carriage contracts with DISH, Hulu and YouTube.

DISH has not carried the regional sports networks since 2019 and Hulu and YouTube TV did not renew contracts at the end of 2020, Moody’s said.

Intelsat Jackson softens

Intelsat Jackson Holdings SA’s bonds were softer in secondary trading during the session, a source said.

Intelsat Jackson’s 5½% senior notes due 2023 headed out at 62½ bid, down from where the paper was last seen on Thursday at 63¼ bid.

The company’s 8½% senior notes due 2024 fell 1 point to 64 bid on Monday.

Parent company Intelsat SA announced in February that it reached a Chapter 11 bankruptcy restructuring plan that would cut its debt from nearly $15 billion to $7 billion.

The satellite operator requested a March 17 hearing to seek court approval and establish procedures to solicit votes on the plan.

Intelsat filed for Chapter 11 bankruptcy in May 2020 in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division.

Hertz notes on upswing

Hertz Corp.’s notes continued to improve on Monday as the company moves closer toward exiting bankruptcy this summer, according to a market source.

The car rental operator’s 5½% notes due 2024 rose 1¼ points to 81¼ bid on Monday.

In the same session a week ago, the notes traded at 80½ bid.

Last week, Hertz filed a joint Chapter 11 bankruptcy plan of reorganization and reported it received a $4.2 billion buyout offer from Knighthead Capital Management, LLC and Certares Opportunities LLC to purchase a majority and up to all of the company’s common stock after it exits bankruptcy.

A hearing on the offer is scheduled for April 16 in the U.S. Bankruptcy Court for the District of Delaware.

Hertz filed for Chapter 11 in May 2020.

Frontier paper improves

Bankrupt Frontier Communications Corp.’s 7 5/8% notes due 2024 were seen up 1 point at 56¾ bid on Monday, a source said.

Frontier said in a 10-K filing with the Securities and Exchange Commission on Wednesday that it expects to emerge from Chapter 11 bankruptcy early this year.

The company intends to eliminate about $11 billion of debt from its balance sheet at the exit.

Frontier Communications reported it has received regulatory approvals from all the required states, except California, as well as approval from the Federal Communications Commission for the restructuring.

The U.S. Bankruptcy Court for the Southern District of New York confirmed the company’s plan of reorganization in August. The company filed for bankruptcy in April 2020.

AMC bonds gain

AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) climbed more than 2¾ points on Monday to trade better than 80¾ bid, a source said. Volume was heavy with $18.75 million of notes traded.

The distressed movie theater owner’s bonds have rallied this year after the company raised additional funding and ahead of New York City’s reopening of theaters on Friday at 25% capacity.

The 12% notes were quoted at the start of the year at 27 bid.

AMC plans to release fourth quarter and year-end earnings results on Wednesday.

Oil declines, tone soft

Oil prices gave back some gains on Monday after rising more than $5 a barrel last week on extended production cuts.

North Sea Brent crude oil futures for May deliveries dropped $1.12 to settle at $68.24.

West Texas intermediate crude oil for May deliveries fell $1.04 to settle at $65.05 a barrel.

The Organization of the Petroleum Exporting Countries announced on Thursday that production cuts would be extended for most countries through April.

Petroleum refinery and supplier PBF Holding Co. LLC’s 7¼% notes due 2025 (B3/B+) rose 2 points to trade at 78 bid on Monday, a source said.

Market tone was mixed but mostly softer on the day.

The Federal Reserve Board announced Monday that it will extend its paycheck protection program liquidity facility by three months to June 30 to help support the flow of credit to small businesses.

The other active facilities created in response to the pandemic, including the primary dealer credit facility, have not had significant usage since last summer and will expire as scheduled on March 31, the Fed said.

The S&P U.S. High Yield Corporate Distressed Bond Index ended Friday up 0.2% and with a month-to-date total return of 1.15% and a year-to-date total return of 15.34%.

The iShares iBoxx High Yield Corporate Bond ETF was down 63 cents, or 0.73%, at $85.99 on Monday.

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