Diamond Sports notes rally on debt changes; Talen higher; Kaisa lower; Evergrande quiet

By Cristal Cody

Tupelo, Miss., Nov. 8 – Diamond Sports Group LLC’s bonds climbed in early trading on Monday after parent Sinclair Broadcast Group Inc. reported it had taken on some of the company’s debt.

The paper drifted from the morning highs but still closed better on the day.

Diamond Sports’ 6 5/8% senior notes due 2027 (Ca/CC) jumped about 4½ points over the morning before going out 2½ points higher.

Market tone was mixed with stocks stronger on Monday.

The iShares iBoxx High Yield Corporate Bond ETF fell 11 cents to close at $87.39.

Oil continued to gain after climbing nearly $2.50 on Friday.

West Texas Intermediate crude oil benchmark futures for December deliveries settled Monday up 66 cents at $81.93 a barrel.

In other secondary market action, Talen Energy Supply LLC’s notes traded higher.

Kaisa Group Holdings Ltd.’s dollar bonds softened on Monday after trading was halted in the issuer’s Hong Kong-listed shares on Friday following a missed debt payment by a company unit.

Kaisa joins other issuers in the space with missed debt payments, including China Evergrande Group in September and Fantasia Holdings Group Co. Ltd. and Modern Land (China) Co., Ltd. in October.

China Evergrande made a payment on its $1 billion of 9½% senior notes due 2024 within the 30-day grace period after failing to pay the coupon when it was due Sept. 29, Fitch Ratings said in a report on Friday.

The Shenzhen, China-based real estate developer also in October made an interest payment within the grace period on another bond but has more bond payments due this month.

“An Evergrande subsidiary has a total of $82.5 million in interest payments due on its notes on Nov. 6, while the company faces the expiration of grace periods for other bonds on Nov. 11,” Fitch said.

China Evergrande’s paper quieted on Monday. The company’s 8¾% senior notes due 2025 (C/C/C) were last seen active on Friday at 25 bid, down about ½ point, a source said.

Diamond Sports higher

Diamond Sports’ 5 3/8% senior secured notes due 2026 (Caa1/CCC) rose 1¾ points over the morning before trading by the close about ¼ point to ¾ point stronger on the day at 53 1/8 bid, a source said.

The issue went out Friday at 52¾ bid.

Diamond Sports’ 6 5/8% senior notes due 2027 (Ca/CC) jumped about 4½ points to hit 30 bid in early trading on Monday before ending the day off the morning highs.

The notes improved to 28 bid by the close, up from 25½ bid on Friday.

Sinclair announced on Monday that it has purchased and assumed the lenders rights and obligations for approximately $184.4 million under the existing accounts receivable securitization facility of Diamond Sports Group, LLC’s indirect subsidiary, Diamond Sports Finance SPV, LLC.

The payment represents 101% of the aggregate outstanding principal amount of the loans.

Sinclair said it has amended the facility to increase the maximum limit availability to up to $400 million from up to $250 million and to extend the maturity by one year to Sept. 23, 2024.

In October, Sinclair reported it was continuing to seek new funding for the Chesapeake, Va.-based sports broadcast group unit.

The Hunt Valley, Md.-based diversified media company’s total debt as of Sept. 30 was $12.53 billion, which includes $8.12 billion of debt from Diamond Sports.

On Wednesday, Sinclair reported third-quarter profits of $1.5 billion were down 0.3% from the same period last year, while net income improved to $19 million versus a net loss of $3.26 billion in the year-ago period.

Talen notes up

Talen Energy Supply’s 10½% senior notes due 2026 (B3/CCC/B-) rose 1½ points to 73½ bid in active secondary trading on Monday, a source said.

The notes are stronger so far in November after ending October at the 66 bid range and September at the 56 bid area.

The Woodlands, Tex., and Allentown, Pa.-based power company’s 7% senior notes due 2026 (B3/CCC/B-) were nearly 5 points better and trading with a 62 handle in light activity during the session.

The issue has gained about 7 points so far in the month and over 15 points since the close of September.

Kaisa notes soften

Dollar paper in China’s property developer space remained weak on Monday.

Kaisa Group’s 9 3/8% senior notes due 2024 (Caa2//CCC+) fell ½ point to 30½ bid, a source said.

The issue has plunged from the 99 handle it traded with back in May and the 87 handle seen in early September.

Kaisa’s Hong Kong Stock Exchange-listed shares were halted in trading on Friday pending an announcement from the company.

A unit of the Shenzhen, China-based real estate developer reportedly missed a debt payment in the prior week.

Kaisa has been downgraded by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings over refinancing concerns for the company’s upcoming bond maturities, including $400 million of notes due Dec. 7.

Distressed returns improve

Distressed index returns closed the prior week higher.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return improved to 0.77% on Friday, compared to minus 0.16% on Thursday, minus 0.7% on Wednesday, 0.23% on Tuesday and minus 0.05% on Nov. 1.

Month-to-date total returns rose to 0.08% versus minus 0.68% on Thursday, minus 0.52% Wednesday, 0.18% on Tuesday and minus 0.05% at the week’s start.

Year-to-date total returns totaled 29.13% on Friday versus 28.14% on Thursday, 28.36% on Wednesday, 29.26% on Tuesday and 28.97% at the beginning of the week.

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