Diamond Sports, Ligado, Moss Creek bonds up; Frontier flat; Mallinckrodt paper softens

By Cristal Cody

Tupelo, Miss., April 27 – Diamond Sports Group LLC’s bonds continued to gain on Tuesday in heavy trading for a second consecutive session on reports of potential financing for the company.

The company’s 6 5/8% senior notes due 2027 (Caa2/CCC-) added another 2½ points to hit 53½ bid on $28 million of bonds traded, according to a market source.

On Monday, the issue rose 2 3/8 points on more than $27.6 million of trading volume.

The notes started the year in the 60 bid range.

Diamond Sports’ 5 3/8% senior secured notes due 2026 (B2/CCC+) also rose 1 1/8 points to 72¾ bid on $18 million of secondary supply, the source said.

The 2026 notes traded more than 1½ points better on over $14 million of secondary volume in the prior session.

The issue traded at the start of the year at 81¼ bid.

Parent company Sinclair Broadcast Group, Inc. had reported in February soft guidance for the Chesapeake, Va.-based sports broadcast group along with an interest in liability management initiatives that could include a debt exchange or redemption.

Ligado climbs

The distressed market also saw strong trading action in Ligado Networks’ 15½% senior secured first-lien notes due 2023 (Caa1) on Tuesday, according to market sources.

The notes headed out up 2 points at 99½ bid and yielding more than 19% on $4 million of paper traded.

Ligado’s notes traded at 96½ bid a week ago and at 98 bid as the year kicked off.

The company’s 17½% senior secured second-lien notes due 2024 (Ca) were quoted at 76 bid during the session, 1¼ points better than where the issue was last seen a week ago.

The Reston, Va.-based satellite communications company’s bonds were up on reports the company plans to price a new debt offering.

Energy bonds up

Market tone was mixed as the Federal Reserve kicked off its two-day monetary policy meeting on Tuesday.

The iShares iBoxx High Yield Corporate Bond ETF fell 12 cents to close at $87.21.

Oil prices jumped higher over the day.

West Texas intermediate crude oil futures for June deliveries settled up $1.03 at $62.94 a barrel.

North Sea Brent crude oil futures for June deliveries rose 77 cents to settle the day at $66.42 a barrel.

Oil and gas bonds in the distressed space were mostly better in thin secondary activity, a source said.

Offshore driller Transocean Inc.’s 9.35% senior notes due 2041 (C/CCC-/) improved more than 1¼ points to 52 bid.

Oil and gas exploration company Moss Creek Resources Holdings Inc.’s 7½% senior notes due 2026 (Caa2/B) traded up 1¼ points to 89½ bid.

Frontier stable

Meanwhile, Frontier Communications Corp.’s bonds have been among the actively traded junk bonds for more than a week and continued trading heavily on Tuesday, a market source said.

Frontier’s 11% senior notes due 2025 were unchanged at 75¼ bid by late afternoon after climbing ¾ point on Monday and up 5¼ points from the same day last week.

The company expects to emerge from Chapter 11 bankruptcy on April 30 and eliminate more than $10 billion of debt in its restructuring plan with unsecured bondholders representing more than 75% of the company’s approximate $11 billion of outstanding unsecured bonds.

Frontier said the restructuring agreement leaves unimpaired all general unsecured creditors and holders of its secured and subsidiary debt.

The company filed for Chapter 11 on April 14, 2020 in the U.S. Bankruptcy Court for the Southern District of New York.

The Norwalk, Conn.-based telecommunications company announced Friday that its new common stock will begin trading on the Nasdaq on May 4 under the ticker “FYBR.”

Mallinckrodt declines

Bankrupt pharmaceuticals maker Mallinckrodt plc’s bonds remained soft on Tuesday after the company posted a March operating loss and a week after filing a Chapter 11 reorganization plan, a source said.

The company’s 5 5/8% notes due 2023 were quoted at 68 bid, down 2 points from where the notes were last seen Thursday and off 5½ points from the same day a week ago.

Mallinckrodt’s 4¾% notes due 2023 also were down 1½ points from Friday at 17½ bid.

The company on Monday reported a $2.16 million operating loss on zero net sales for the period ended March 26 and a net loss for March of $7.49 million.

Mallinckrodt filed its Chapter 11 plan of reorganization and disclosure statement in the U.S. Bankruptcy Court for the District of Delaware a week ago.

A hearing on the plan is scheduled for May 26.

The company 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, which has principal offices in Dublin and St. Louis, filed for Chapter 11 bankruptcy on Oct. 12, 2020.

Endo bonds gain

In other distressed pharmaceuticals bonds trading Tuesday, Endo Finance LLC’s 6% senior notes due 2028 (Caa2/CCC+) jumped 2 points on the day to head out at 76½ bid, a market source said.

The notes have improved from trading at 68¼ bid in the same session a week ago.

In early January, the issue was quoted at 84 bid.

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

Credito Real falters

Elsewhere, Credito Real SAB de CV’s paper traded more than 5¾ points to about 11½ points weaker by late afternoon after the distressed Mexican automotive subprime lender reportedly revised its 2020 annual statement, a market source said.

The company’s 9½% senior notes due 2026 (//BB+) fell more than 5¾ points to 90¼ bid on more than $7 million of secondary volume.

Credito’s 9 1/8% perpetual subordinated securities (//BB-) dropped 11½ points to 70 bid on $1.5 million of paper traded Tuesday.

Last week, Alpha Holding SA de CV’s 9% senior notes due 2025 (Caa2/CCC/CC) sank, heading out Friday at 32½ bid from 69½ bid in the same session a week prior.

The Mexico-based commercial financing company announced on April 20 a restatement of its financial statements for 2018, 2019 and 2020 quarterly results due to accounting errors.

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