Diamond Sports, TPC higher; PBF, Talen down; Envision drops; Mallinckrodt, Kaisa up

By Cristal Cody

Tupelo, Miss., Nov. 19 – Diamond Sports Group LLC’s notes recovered about ½ point to 2 points with the paper at the top of the most active distressed issues on Friday.

Diamond Sports’ tranches both “were up” over the session, a source said.

TPC Group Inc.’s 10½% senior secured notes due 2024 (Caa2/CCC-/B-) also stemmed losses on Friday and picked up 1¼ points.

The junk space was mixed with measured volatility edging up 3%.

“The market was a little bit soft,” a source said. “Some guys didn't want to sell, but still things are getting done in the new issue market.”

The iShares iBoxx High Yield Corporate Bond ETF closed down 7 cents to $86.56.

Oil and gas-related issuers softened as oil prices dropped more than $2 on Friday.

West Texas Intermediate crude oil benchmark futures for December deliveries sank $2.91 to settle at $76.10 a barrel.

Bermuda- and Houston-based oil and gas drilling contractor Nabors Industries Inc.’s 5¾% senior notes due 2025 (Caa2/CCC-) declined 2¼ points to under 90 bid on over $10.7 million of volume, a source said.

PBF Holding Co. LLC’s notes dropped nearly 3 points during the session.

Talen Energy Supply LLC’s bonds were down 1½ points to 4½ points in strong trading action.

In the distressed health care space, bonds were mixed.

Envision Healthcare Corp.’s 8¾% senior notes due 2026 (Ca/CC) sank 5¾ points to 64 bid.

Mallinckrodt plc’s 5½% notes due 2025 jumped 3½ points as the company continues through the Chapter 11 bankruptcy process.

China issuers were mixed on Friday following a rash of downgrades and negative outlooks.

China Evergrande Group’s 8¾% senior notes due 2025 (C/C/C) were nearly ½ point better in thin volume from a foreign dealer, a source said.

“They have traded more offshore,” the source said. “Not much has traded in the last 15 days.”

S&P Global Ratings said in a report on Thursday that it believes Evergrande is likely to default with other Chinese property developers expected to default over the next six months to year.

Currently, Kaisa Group Holdings Ltd., Fantasia Holdings Group Co. Ltd., Sinic Holdings (Group) Co. Ltd., China Properties Group Ltd. and Modern Land (China) Co. Ltd. have missed bond payments.

Kaisa Group’s 9 3/8% senior notes due 2024 (C//CCC-) traded 1½ points higher on Friday.

Diamond Sports up

Diamond Sports’ paper went out on Friday about ½ point to 2 points higher in strong trading after sinking over the first four sessions of the week, according to market sources.

The company’s 5 3/8% senior secured notes due 2026 (Caa1/CCC) improved over ½ point to the 48½ bid area from where the issue last traded on Thursday. Supply totaled over $12.7 million on Friday.

The secured notes spent much of the week lower, declining over 5 points on Monday, 1½ points on Tuesday, about ¼ point on Wednesday and over 2 points on Thursday.

The Chesapeake, Va.-based sports broadcast group’s 6 5/8% senior notes due 2027 (Ca/CC) rose 2 points to 24 bid on $21 million of paper traded on Friday.

Diamond Sports’ unsecured notes slid about 6¼ points on Monday, about 1¼ points on Tuesday, ½ point on Wednesday and 2¾ points on Thursday.

The company’s “debt was trading lower after DISH Network Corp. and Sinclair Broadcast Group Inc. announced they reached a new multiyear carriage agreement that does not appear to include the Diamond Sports regional networks as part of the deal,” according to a Fitch Ratings report on Friday.

“The unsecured notes due in 2027 were trading below 30 as of Thursday, while the first-lien notes and term loan were both in the low-50s,” Fitch said, noting the company has been on its Top Market Concern Bonds list since November 2020.

Parent Sinclair reported it has been in negotiations with lenders and noteholders to restructure Diamond Sports’ balance sheet this year but so far has not reached a deal.

TPC improves

TPC Group’s 10½% senior secured notes due 2024 (Caa2/CCC-/B-) clawed back losses on Friday to trade up 1¼ points at 68¾ bid on Friday, a source said.

The issue attracted $2.65 million of secondary action.

The notes dropped about 3½ points on Monday, fell about ¾ point on Tuesday, were over 1½ points weaker on Wednesday and slid 5 points on Thursday.

TPC’s notes traded at the 91 bid range in the prior week.

The Houston-based chemical manufacturer announced its third-quarter earnings results a week ago.

PBF, Talen down

Energy bonds were seen off over the day as oil slid, a source said.

Parsippany, N.J.-based petroleum refiner PBF Holding’s 6% senior notes due 2028 (Caa1/B/B-) fell nearly 2¾ points to the 71 bid area on $2.5 million of secondary activity.

Talen Energy’s notes dropped 1½ points to 4½ points on Friday.

The company’s 10½% senior notes due 2026 (Caa1/CCC/B-) slid 4½ points to 61½ bid in light trading totaling $1 million.

The Woodlands, Tex., and Allentown, Pa.-based power company’s 4.6% senior notes due 2021 (Caa1/CCC/B-) were quoted at 87 3/8 bid, down 3 7/8 points on over $5.5 million of secondary volume.

Envision lower

In other issues, Envision Healthcare’s 8¾% senior notes due 2026 (Ca/CC) dove 5¾ points to 64 bid during the session, a source said.

Nashville-based Envision is a health care company and hospital-based physician group.

Mallinckrodt higher

Bankrupt pharmaceuticals maker Mallinckrodt’s paper was higher with the company’s 5½% notes due 2025 up 3½ points to 58¾ bid, a source said.

The notes are trading over 10 points higher month to date.

Mallinckrodt (/D) is underway in the Chapter 11 bankruptcy process in the U.S. Bankruptcy Court for the District of Delaware after filing on Oct. 12, 2020.

Opioid-related lawsuits against the Dublin- and St. Louis-based company are moving through the bankruptcy court.

Evergrande thinly traded

China Evergrande’s dollar notes remained mostly quiet in thin trading on Friday, a source said.

Evergrande’s 8¾% senior notes due 2025 (C/C/C) were nearly ½ point better under the 24 bid area in thin action.

Before Friday, the notes were last seen trading Tuesday unchanged on the week at 23½ bid.

On Thursday, the Shenzhen, China-based real estate developer reported it will sell its stake in film producer and streaming services firm Hengten Network Group for HK$2.13 billion and expects to take a loss of HK$8.5 billion from the transaction.

Kaisa better

Kaisa’s 9 3/8% senior notes due 2024 (C//CCC-) improved 1½ points to hit 40 bid on $3 million of secondary supply on Friday, according to a market source.

The notes were more than 10 points higher on the week.

Kaisa was downgraded on Tuesday by Fitch Ratings following missed interest payments last week on its 11.7% senior notes due 2025 and 11.95% senior notes due 2023.

The Shenzhen, China-based real estate developer also faces $400 million of bonds due in December.

Distressed index declines

Distressed index returns declined on Thursday.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return dropped to minus 1.52% from 0.03% on Wednesday, minus 0.79% on Tuesday and minus 1.46% on Monday.

Month-to-date total returns declined to minus 2.36% on Thursday from minus 0.85% on Wednesday, minus 0.88% on Tuesday and minus 0.09% at the start of the week.

Year-to-date total returns were weaker at 25.98% versus 27.92% on Wednesday, 27.89% on Tuesday and 28.91% on Monday.

© 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.