Diamond Sports weakens; Plains All American, PBF, DCP lower; Carlson Travel bonds soft

By Cristal Cody

Tupelo, Miss., June 24 – Diamond Sports Group LLC’s bonds remained weak in lighter distressed secondary trading on Thursday.

The company’s 5 3/8% senior secured notes due 2026 (B2/CCC+) declined 1 point to 65¾ bid, a source said.

The notes fell nearly 2½ points on Tuesday and ¾ point on Wednesday following parent company Sinclair Broadcast Group, Inc.’s disclosure of attempts to secure new funding for the Chesapeake, Va.-based sports broadcast group on Monday.

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

Diamond Sports’ 6 5/8% senior notes due 2027 (Caa2/CCC-) declined 2¼ points during the session to 49¼ bid on $3 million of paper traded Thursday.

The issue fell 3½ points in the prior session and about 2 points on Tuesday.

The notes traded at the 60½ bid area in early 2021.

Sinclair announced in an 8-K filing with the Securities and Exchange Commission on Monday that it has been unable to reach a definitive agreement with certain lenders and noteholders on funding new debt and exchanging and/or repurchasing its existing debt.

Sinclair made two proposals to lenders and noteholders of Diamond Sports, including a March 22 proposal for $600 million of new money first priority super priority debt and up to $6.34 billion of second priority super priority debt.

In an April 29 proposal, Sinclair proposed issuing $500 million of new money financing and a roll-up of notes into $100 million of first-lien bonds at prices between par and a 35% discount and yields from 9½% to 6.615% across three tranches.

PAA, PBF, DCP drop

Overall market tone was stronger.

The iShares iBoxx High Yield Corporate Bond ETF added 23 cents to close at $87.84.

Oil prices remained higher on the day.

North Sea Brent crude oil futures for August deliveries rose 37 cents to settle at $75.56 a barrel.

West Texas Intermediate crude oil benchmark futures for August deliveries settled up 22 cents at $73.30 a barrel.

S&P Global Ratings said in a report on Thursday that it has raised its short-term oil and gas price assumptions for WTI and Brent crude for 2021 as market conditions improve. S&P also raised its Henry Hub, Alberta Energy Co. and Title Transfer Facility natural gas price assumptions for 2021 and 2022.

In the secondary market, Plains All American Pipeline, LP’s 6 1/8% series B fixed-to-floating-rate cumulative redeemable perpetual preferred units (Ba3/BB/BB) fell 2¼ points to 88¼ bid on more than $5.5 million of volume during the session, a source said.

The Houston-based natural gas and crude oil transporter’s issue is redeemable on or after Nov. 15, 2022 or in connection with a ratings event.

PBF Holding Co. LLC’s 6% senior notes due 2028 (B3/B+/B+) declined more than 1 point to the 70 bid area on $1 million of trading supply, a source said.

The notes from the Calgary, Alta.-based subsidiary of Parsippany, N.J.-based petroleum refiner PBF Energy Inc. are up from the 56¾ bid area at the start of the year.

Meanwhile, DCP Midstream Operating, LP’s 5.85% fixed-to-floating rate junior subordinated notes due 2043 (Ba1/BB-/BB-) dropped more than 1 point to the 92½ bid area on $2.5 million of trading activity Thursday, a source said.

The Denver-based natural gas company’s notes traded at 85½ bid as the year opened.

CWT notes down

Bonds from corporate travel management company CWT, formerly known as Carlson Travel Inc., remain soft following a second ratings downgrade this week for the issuer.

The Minneapolis-based company’s 11½% senior secured notes due 2026 (D/C) last traded on Wednesday in heavy volume down 4½ points at 50 bid, a source said.

The notes previously traded Friday at 54½ bid.

The issue is down slightly from 57¼ bid at the beginning of the year.

S&P said Thursday it lowered CWT’s rating to D from CCC and all of its notes to D.

Fitch Ratings downgraded the issuer on Tuesday.

The downgrades follow the company’s missed interest payment on its second-lien and third-lien senior secured notes that was due on June 15.

S&P said it views the missed interest payments as tantamount to a default.

CWT announced on Monday that it entered into a forbearance agreement relating to the missed interest payments and is in discussions with lenders and bondholders.

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