Diamond Sports declines; Talen, Nine Energy gain; Endo softens; Mallinckrodt improves

By Cristal Cody

Tupelo, Miss., April 13 – Diamond Sports Group LLC’s bonds fell about 1 to 2 points in distressed secondary trading on Tuesday.

Diamond Sports’ 6 5/8% senior notes due 2027 (B3/CCC-) declined 1½ points to 45½ bid on $12.5 million of trading supply, a market source said.

The issue started the year in the 60 bid range.

The Chesapeake, Va.-based sports broadcast group’s bonds have weakened since parent company Sinclair Broadcast Group, Inc. reported in February soft guidance for the subsidiary and an interest in liability management initiatives that could include a debt exchange or redemption.

Talen, Nine Energy better

Overall market tone was mixed on Tuesday.

The iShares iBoxx High Yield Corporate Bond ETF rose 6 cents to $87.17.

North Sea Brent crude oil futures for June deliveries settled at $63.67 a barrel, up from $63.28 a barrel on Monday.

West Texas intermediate crude oil futures for May deliveries rose 48 cents to settle at $60.18 a barrel. WTI June deliveries settled up 49 cents to $60.24 a barrel.

Talen Energy Supply LLC’s paper traded more than 1½ points higher during the session, a source said.

The company’s 10½% notes due 2026 (B3/CCC+/B) were quoted at 90 bid, up 1 5/8 points on $4 million of secondary volume.

Talen’s 6% senior notes due 2036 (B3/CCC+/B) climbed more than 2¼ points to 60½ bid on less than $2 million of paper traded.

The Woodlands, Tex., and Allentown, Pa.-based power company is among energy companies affected by the February winter storm that hit Texas and the southcentral United States, sparking exorbitant energy costs.

Houston-based oilfield services company Nine Energy Service, Inc.’s 8¾% notes due 2023 (Caa2/D) saw heavy trading on Tuesday at 40½ to 41 bid, a source said.

The notes were last active in the secondary market on March 24 at 30 bid.

The issue traded at 44½ bid at the year’s start.

Nine Energy reported March 8 that it expects to generate a net loss and negative adjusted EBITDA for the first quarter following major shutdowns within all its Texas service lines due to the winter storm.

The company will release first-quarter earnings results on May 6.

Several energy companies have filed for Chapter 11 bankruptcy due to the storm costs, including retail power provider Entrust Energy, Inc., Griddy Energy LLC and Brazos Electric Power Cooperative Inc.

Houston- and Princeton, N.J.-based NRG Energy Inc. reported in March that it expects an estimated $750 million loss due to the Texas winter storm and withdrew its 2021 guidance due to new resettlement data from the Electric Reliability Council of Texas.

San Antonio electric utility CPS Energy has filed a lawsuit against Ercot and natural gas suppliers over inflated prices.

Newark, N.J.-based energy supplier Genie Energy Ltd. reported spot energy prices soared from a usual $50 per megawatt hour to $9,000 per megawatt hour during the period.

Endo declines

Endo Finance LLC’s 6% senior notes due 2028 (Caa2/CCC+) fell 3½ points in strong secondary volume to 75 bid over the day, a market source said.

In the same session a week ago, the notes were quoted at 82 bid.

The bonds started the year at 84 bid.

Parent Dublin-based pharmaceuticals maker Endo International plc announced on Tuesday that it will report its first-quarter earnings results on May 6.

Mallinckrodt stronger

Bankrupt pharmaceuticals maker Mallinckrodt plc’s bonds saw thin trading during the session, a source said.

The company’s 4¾% notes due 2023 were up about 3 points at 25 bid in light supply.

Mallinckrodt announced in March that it reached an agreement with a group of first-lien term lenders holding about $1.3 billion of its outstanding first-lien term loans to support its restructuring support agreement.

Mallinckrodt filed for Chapter 11 bankruptcy in October in the U.S. Bankruptcy Court for the District of Delaware.

The company, with principal offices in Dublin and St. Louis, has received approval to extend filing a bankruptcy restructuring plan until Aug. 9.

Hertz improves

Hertz Corp.’s 7% notes due 2028 traded Tuesday at 78½ bid, up 4½ points from Monday and the same session a week ago, a source said.

The bonds traded at the start of 2021 at a 50 bid area.

On Tuesday, the company’s Chapter 11 disclosure statement was objected to by a U.S. trustee, according to a filing in the U.S. Bankruptcy Court for the District of Delaware.

Hertz announced on April 3 that it selected a new proposal with greater creditor support from Centerbridge Partners, LP, Warburg Pincus LLC, and Dundon Capital Partners, LLC to fund its exit from Chapter 11 bankruptcy.

The Estero, Fla.-based car rental operator filed an amended Chapter 11 plan of reorganization and related disclosure statement in the U.S. Bankruptcy Court for the District of Delaware.

Hertz had filed a joint Chapter 11 bankruptcy plan of reorganization on March 2 with a $4.2 billion buyout offer from Knighthead Capital Management, LLC and Certares Opportunities LLC.

Under both proposals, Hertz said it would eliminate approximately $5 billion of debt, have over $2 billion of global liquidity and completely eliminate all corporate debt on its European business.

A hearing on the offer is scheduled for Friday.

Hertz filed for Chapter 11 bankruptcy on May 22, 2020.

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