Talen bonds mostly decline; PBF, AMC soar in strong secondary supply; Diamond Sports up

By Cristal Cody

Tupelo, Miss., Aug. 24 – Talen Energy Supply LLC’s paper mostly reversed course Tuesday on reports the company is in discussions with legal and financial advisers.

Talen’s 10½% senior notes due 2026 (B3/CCC/B-) dropped 4 points on over $7 million of notes traded.

Distressed secondary supply was heaviest in two names over the session – PBF Holding Co. LLC and AMC Entertainment Holdings, Inc., a source said.

PBF’s 9¼% senior secured notes due 2025 (Ba3/BB/BB) ticked up about 2½ points on secondary volume totaling more than $22 million as oil prices rallied more than $5 week to date.

Movie theater operator AMC’s notes improved about 3 points a day after the U.S. Food and Drug Administration approved the Pfizer-BioNTech Covid-19 vaccine for people 16 years and older.

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) jumped 3 1/8 points on over $16 million of secondary volume.

In other distressed issues active Tuesday, Diamond Sports Group LLC’s paper traded 1 point to 1½ points better.

Talen active

Talen’s paper mostly softened with distressed issues down about 1¼ points to 4 points in the secondary market on Tuesday, a source said.

Talen’s 6½% senior notes due 2025 (B3/CCC/B-) traded in the 39¼ to 41½ bid range over the session before going out down 1¼ points at 40 bid on over $11 million of volume.

The notes moved out of the high 30s on Monday after improving about 1½ points.

Talen’s 10½% senior notes due 2026 (B3/CCC/B-) were weaker and ended the session off 4 points at 40¾ bid on trading supply totaling more than $7 million.

The issue had improved about 1¾ points in the prior session.

Meanwhile, Talen’s 7¼% senior secured notes due 2027 (Ba3/B+/BB-) gained 2 points during the session to the 89½ bid area.

S&P Global Markets downgraded The Woodlands, Tex., and Allentown, Pa.-based power company and its senior secured and unsecured bonds in the prior week.

Earlier in August, Talen released second-quarter earnings results and announced a joint venture to create a Bitcoin mining company.

PBF notes gain

PBF Holding’s bonds traded about 2½ points to 5¼ points stronger on Tuesday, a source said.

The company’s 6% senior notes due 2028 (B3/B/B+) climbed 4¾ points to 60¾ bid on over $12 million of secondary activity.

PBF’s 9¼% senior secured notes due 2025 (Ba3/BB/BB) added about 2½ points to 91¾ bid on more than $22 million of paper traded Tuesday.

The Parsippany, N.J.-based petroleum refiner’s secured notes gained 1¾ points on Monday.

AMC improves

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) climbed 3 1/8 points to head out at 90½ bid, a source said.

Secondary volume totaled over $16 million Tuesday.

The notes were trading 4 points better week to date and closing in on where the issue was bid at the 102 area in July.

The Leawood, Kan.-based movie theater chain raised $1.25 billion of new equity capital during the second quarter.

Diamond Sports up

Diamond Sports Group’s 5 3/8% senior secured notes due 2026 (B2/CCC+) rose 1 point to 61¼ bid in light trading on Tuesday, a market source said.

Diamond Sports’ 6 5/8% senior notes due 2027 (Caa2/CCC-) also added 1½ points to 39¼ bid over the day.

The notes are edging higher after softening following parent Sinclair Broadcast Group, Inc.’s announcement that DISH Network Corp. dropped its broadcast and tennis TV stations on Aug. 16.

In June, Sinclair reported unsuccessful attempts to secure new funding for Diamond Sports, a Chesapeake, Va.-based sports broadcast group.

Distressed returns improve

Distressed index daily returns were up at the start of the week.

The S&P U.S. High Yield Corporate Distressed Bond index total return rose to 0.47% on Monday from 0.34% on Friday.

Month-to-date total returns improved to minus 1.77% from minus 2.23% ahead of the weekend.

Distressed year-to-date total returns narrowed to 21.7% on Monday from 22.13% on Friday.

Market tone remained strong on Tuesday with stocks higher and oil prices more than $5 better week to date.

The iShares iBoxx High Yield Corporate Bond ETF rose 12 cents to $87.68.

North Sea Brent crude oil futures for October deliveries improved $2.30 to settle the day at $71.05 following a $3.57 gain on Monday.

West Texas Intermediate crude oil benchmark futures for October deliveries settled up $1.90 at $67.54 a barrel after adding $3.50 in the prior session.

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