Shelf Drilling notes trade higher; Peabody improves; AMC edges up; Diamond Sports dips

By Cristal Cody

Tupelo, Miss., April 30 – Distressed bonds saw mixed trading action over Friday’s session as volume thinned.

Bonds in the oil and gas space were mixed with oil prices flat to lower after seeing strong gains on Thursday.

North Sea Brent crude oil futures for June deliveries settled unchanged at $68.56 a barrel after improving $1.29 in the prior session.

West Texas intermediate crude oil benchmark futures declined $1.43 to settle at $63.58 a barrel after rising $1.15 on Thursday.

In the secondary market, Shelf Drilling Holdings Ltd.’s 8¼% senior notes due 2025 (Caa3/CCC+) climbed 2¾ points to 76 bid on $2 million of trading volume on Friday, a source said.

Offshore driller Transocean Inc.’s bonds gave back some gains made in the prior session.

Transocean’s 8% notes due 2027 (Ca/CCC) traded 1 1/8 points lower at 70 3/8 bid on more than $4.5 million of trading volume, a source said. The notes traded Thursday up 2 1/8 points on $15.5 million of paper traded.

Elsewhere in the distressed energy space, St. Louis-based coal producer Peabody Energy Corp.’s 6 3/8% senior secured notes due 2025 (Caa1/CCC-) gained ½ point to 42 bid, a market source said.

Canonsburg, Pa.-based coal producer Consol Energy Inc.’s 11% second-lien notes due 2025 (Caa1/CCC) were last seen trading Thursday at 95 bid.

Overall market tone was mixed with stock indices lower on the day.

The iShares iBoxx High Yield Corporate Bond ETF fell 4 cents to finish at $87.44.

AMC improves

AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) recovered ¼ point to hit 86 bid over the day after trading flat in the prior session, a source said.

The bonds had softened 1¼ points on more than $30.5 million of issues traded Wednesday, a day after the company reported expectations of a first-quarter loss and plans to issue new stock.

The company registered on Tuesday to issue up to 43 million shares of its class A common stock and canceled a plan to seek approval at its May 4 annual stockholders meeting to allow 500 million more authorized common shares.

AMC also expects first-quarter total revenue of $148.3 million versus $941.5 million in the year-ago period and a net loss between $572.2 million and $567.2 million for the quarter ended March 31.

The Leawood, Kan.-based movie theater owner reported in March that 98% of its U.S. locations have reopened.

Diamond Sports softens

Diamond Sports Group LLC’s 6 5/8% senior notes due 2027 (Caa2/CCC-) fell 5/8 point to 54 bid in strong trading activity on Friday, a market source said.

The notes are up from trading at 48¼ bid the same day a week ago.

The Chesapeake, Va.-based sports broadcast group’s bonds have gained over the week on reports the company is discussing new potential financing.

Diamond Sports’ bonds had weakened since February after parent company Sinclair Broadcast Group, Inc. reported soft guidance for the group, along with an interest in liability management initiatives that could include a debt exchange or redemption.

Credito Real recovers

In other secondary trading on Friday, Credito Real SAB de CV’s paper recovered after sliding earlier in the week on reports the Mexican automotive subprime lender revised its 2020 annual statement, a market source said.

The company’s 9½% senior notes due 2026 (//BB+) traded Friday up nearly 6 points at the 101¾ bid area on more than $12.5 million of secondary supply. The notes on Tuesday were quoted down more than 5¾ points to 90¼ bid on more than $7 million of secondary volume.

Credito’s 9 1/8% perpetual subordinated securities (//BB-) headed out Friday up more than 3½ points at the 79 bid area on over $10.8 million of secondary volume. The notes traded Tuesday down 11½ points to 70 bid on $1.5 million of secondary supply.

Alpha Holding SA de CV’s bonds remained soft on Friday after the Mexico-based commercial financing company announced April 20 a restatement of its financial statements for its 2018, 2019 and 2020 quarters due to accounting errors.

Alpha’s 10% notes due 2022 (Caa2/CCC/CC) declined 1 point to 23 bid on Friday in light trading supply, a source said.

The notes have plunged from the 34 bid area the same day a week ago and from the 78 bid range in the week prior.

Alpha’s 9% senior notes due 2025 (Caa2/CCC/CC) were last seen in the secondary market on Thursday at 25 bid, down from 32½ bid in the same session last week and 69½ bid in the same session the prior week.

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