Covid-affected bonds drop; AMC declines; Diamond Sports up; Laredo weakens; Talen steadies

By Cristal Cody

Tupelo, Miss., Aug. 4 – Distressed bonds in spaces impacted by the Delta variant of Covid-19 slipped Wednesday, while overall market tone weakened as oil prices sank.

“There was more chatter of people getting scared of the Delta variant, and all the reopening trades got hit hard,” a source said.

AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) dropped 3½ points.

American Airlines Group Inc.’s 11¾% senior notes due 2025 were down 1 point to unchanged.

Meanwhile Wednesday, Diamond Sports Group LLC’s notes improved over 1 point, pushing the 6 5/8% senior notes due 2027 (Caa2/CCC-/) to 41 bid after falling to the high 30s last week.

Declining oil prices kept energy bonds under pressure over the day.

West Texas Intermediate crude oil benchmark futures for September deliveries fell below $70 Wednesday.

There were a couple of energy names “in the crosshairs a little bit” after oil prices softened, a source said.

Laredo Petroleum, Inc.’s new 7¾% senior notes due July 2029 (B3/B) priced in July were being eyed in the distressed secondary market.

The bonds traded down 1½ points Wednesday to 93 bid.

“It priced at par not too long ago, and it’s just been kind of a punching bag,” a market source said.

The Tulsa-based energy company sold $400 million of the bonds on July 13 at par.

Transocean Inc.’s bonds traded flat to weaker over the session with the 11½ senior guaranteed notes due 2027 (Caa3/CCC+) down 1 7/8 points.

Talen Energy Supply LLC’s bonds mostly held on to gains a day after announcing a joint venture with a bitcoin mining company.

Talen’s 7 5/8% notes due 2028 went out Wednesday down 1 point but up ½ point week to date.

AMC lower

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) dropped 3½ points to 82¾ bid by the close, a source said.

The notes fell 1 3/8 points on Tuesday and softened 1½ points on Monday.

The bonds have declined from trading at the 102 bid area at the start of July.

The Leawood, Kansas-based theater chain is scheduled to release second-quarter earnings results on Monday.

Diamond Sports stronger

Diamond Sports Group’s 5 3/8% senior secured notes due 2026 (B2/CCC+) climbed 1¾ points to the 60¼ bid area in strong trading activity Wednesday, a source said.

The secured issue is 2 points better week to date but remains more than 20 points softer since the start of June.

Diamond Sports’ 6 5/8% senior notes due 2027 (Caa2/CCC-) rallied 1¼ points to 41 bid Wednesday.

The senior notes are trading 1 3/8 points better on the week.

The bonds have declined about 20 points since early June.

Diamond Sports’ paper has remained soft since parent company Sinclair Broadcast Group, Inc. in June disclosed attempts to secure new funding for the Chesapeake, Va.-based sports broadcast group.

Transocean softens

In energy issues, Transocean’s 11½ senior guaranteed notes due 2027 (Caa3/CCC+) fell 1 7/8 points to 97¾ bid during the session, a source said.

The Vernier, Switzerland-based offshore driller’s notes have shed more than 10 points over the past month.

Talen mixed

Talen’s bonds were mixed with the 6½% senior notes due 2025 (B3/CCC+/B-) up about ¼ point to ½ point in thin secondary action Wednesday, a market source said.

The notes added more than 4 points on Monday and traded up 1 point on Tuesday.

The Woodlands, Tex. and Allentown, Pa.-based power company’s 7 5/8% senior secured notes due 2028 (Ba3/BB-/BB-) went out down 1 point at 92 bid with the issue up ½ point week to date.

Talen said in a release on Tuesday the first phase of the new joint venture includes constructing a 180-megawatt bitcoin mining facility at its digital infrastructure campus adjacent to its Susquehanna nuclear power generation station in Berwick, Pa.

Distressed returns weak

Overall market tone was weaker Wednesday.

North Sea Brent crude oil futures for October deliveries dropped $2.03 to settle at $70.38 a barrel.

West Texas Intermediate crude oil benchmark futures for September deliveries declined $2.41 to settle at $68.15 a barrel.

Benchmark October deliveries settled $2.24 lower at $67.79 a barrel.

The iShares iBoxx High Yield Corporate Bond ETF closed down 16 cents at $87.28.

Distressed returns declined over the first two sessions of the week.

The S&P U.S. High Yield Corporate Distressed Bond Index softened to minus 0.26% on Tuesday from minus 0.1% on Monday.

Month-to-date total returns for the first two sessions of August posted at minus 0.36%.

Year to date total returns for the distressed bond index improved to 23.45% on Tuesday from 23.07% at the week’s start.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.