Talen Energy Supply bonds trade mixed; PBF Energy, Transocean notes gain in secondary

By Abigail W. Adams

Portland, Me., Aug. 30 – It was a slow start to the week in the distressed debt space on Monday with volume expected to remain light for the duration of the week.

However, with the high-yield new issue calendar drying up in the final days of summer, some distressed names returned to focus, especially with a rebound in crude oil futures.

Talen Energy Supply LLC’s notes were mixed with the secured tranches trading down while the unsecured tranche rocketed higher.

Transocean Inc.’s junk bonds also continued to move higher as crude oil futures improved.

While activity in the name tempered after last week’s surge, PBF Holding Co. LLC’s junk bonds continued to eke out gains as Hurricane Ida disrupts the gasoline supply chain.

Talen mixed

Talen Energy’s junk bonds were mixed on Monday with the secured tranches trading down in light volume as the unsecured tranche rocketed higher.

Talen’s 7 5/8% senior secured notes due 2028 dropped about 1 point with the notes closing the day at 87, according to a market source.

However, the company’s 10½% senior notes due 2026 jumped 3 3/8 points to close the day at 46.

The power generator’s bonds continue to recover from an S&P Global Ratings downgrade about two weeks ago, which sent the company’s capital structure into a tailspin.

The 10½% notes were trading in the 50 to 51 context prior to the downgrade.

Transocean gains

Transocean’s junk bonds were on the rise on Monday on a strong day for the energy sector.

The offshore drilling contractor’s 6.8% senior notes due 2038 gained about 3 points to close the day at 56, according to a market source.

The 7½% senior notes due 2026 were up 2 points to close the day at 78 3/8.

The 8% senior notes due 2027 were also up about 2 points to close the day just shy of 74½.

And the 11½% senior notes due 2027 were up 2 points to end the day at 101.

Monday was a strong day for the energy sector.

WTI crude oil futures settled at $69.12, an increase of 38 cents or 0.55%. Brent crude oil futures settled at $78.30, an increase of 60 cents or 0.83%.

PBF ekes out gains

After surging the previous week, PBF Energy’s junk bonds continued to eke out gains with Hurricane Ida expected to disrupt the gasoline supply chain.

PBF’s 9¼% senior secured notes due 2025 rose about ½ point in light volume, according to a market source. The notes closed Monday at 97½.

They jumped more than 7 points the previous week.

The petroleum refiner’s 6% senior notes due 2028 also gained about ½ point.

The notes were changing hands in the 67¼ to 67½ context heading into the market close.

The notes rose more than 15 points over the previous week.

Hurricane Ida is expected to send gasoline prices higher, which continued to fuel the positive momentum in PBF Energy’s junk bonds.

PBF’s capital structure surged the previous week due to an expected reduction in the Environmental Protection Agency’s biofuel blending mandates.

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