Diamond Sports bonds stronger; AMC flat; PBF, Talen soften; China Evergrande declines

By Cristal Cody

Tupelo, Miss., Dec. 3 – Paper from Diamond Sports Group LLC and AMC Entertainment Holdings, Inc. led distressed secondary action on Friday.

Diamond Sports’ notes jumped between 1 point and 3¼ points, depending on the issue, following the company’s announcement of a multiple-year renewal agreement with the National Hockey League.

AMC’s bonds steadied after giving back gains in the prior session.

Market tone was mixed with energy bonds weaker on Friday.

West Texas Intermediate crude oil benchmark futures for January deliveries fell 24 cents to settle at $66.26 a barrel.

Volatility climbed with the Chicago Board Options Exchange’s CBOE Volatility index nearly 10% higher on the day at 30.67.

The iShares iBoxx High Yield Corporate Bond ETF closed flat at $86.00 after adding 63 cents on Thursday.

PBF Energy Inc.’s paper softened in light activity.

Talen Energy Supply LLC’s 10½% senior notes due 2026 (Caa1/CCC/B-) declined another 1¼ points after shedding 5¼ points in Thursday’s session.

In other secondary activity, Apex Tool Group LLC’s senior notes were down ¼ point after sinking about 7 points on Thursday following the paper’s downgrade to CCC- status.

China Evergrande Group’s 8¾% senior notes due 2025 (C/C/C) dropped over 2 points on Friday as the company continues to face a default on its debt.

Issuers including Evergrande, 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 since September.

Kaisa’s bonds were quiet after gaining about 3 points to 4¼ points in the prior session.

Diamond Sports better

Diamond Sports’ secured and unsecured notes were stronger on Friday following the announcement of a multiple-year renewal agreement with the NHL, a source said.

The company’s 5 3/8% senior secured notes due 2026 (Caa1/CCC) improved 1 point to 50 bid on $17.5 million of secondary volume.

Diamond Sports’ 6 5/8% senior unsecured notes due 2027 (Ca/CC) climbed 3¼ points to 25¼ bid in late afternoon trading supply of more than $22 million.

Parent Sinclair Broadcast Group Inc. announced Thursday that Diamond Sports entered into a multiple-year renewal of its digital and outer market distribution rights agreement with the NHL.

Diamond Sports’ Bally Sports Regional Networks will offer streaming content, including live games, to local territories of 12 NHL teams.

Sinclair said the Chesapeake, Va.-based sports broadcast group’s networks serve as the televised home to more than half of all MLB, NHL and NBA teams based in the United States.

AMC notes flat

AMC’s 12% second-lien senior secured notes due 2026 (Ca/CCC-) traded flat on Friday at par ¼ bid on $12 million of volume after softening in the previous session, a source said.

The notes dropped 1¾ points on Thursday on $10 million of paper traded.

The Leawood, Kan.-based movie theater owner’s secured notes were about 1¼ points to 1½ points stronger when the market opened on Monday on reports of strong ticket sales for the company’s NFT promotion for the Dec. 16 opening of Spider-Man: No Way Home.

PBF notes soften

In distressed energy issues, PBF’s 6% senior notes due 2028 (Caa1/B/B+) fell nearly 1½ points to the 62 bid area over the day, according to a market source.

Trading was thin with less than $1 million of volume in the Parsippany, N.J.-based petroleum refiner’s notes.

Talen trades lower

Talen Energy’s notes continued to weaken over the session after sliding on Thursday following the company’s announcement of a new first-lien facility, a source said.

Talen’s 10½% senior notes due 2026 (Caa1/CCC/B-) declined 1¼ points to 57½ bid on more than $9 million of paper traded over the day.

The notes slid 5¼ points on over $25 million of secondary supply in the prior session.

The Woodlands, Tex., and Allentown, Pa.-based power company announced that it obtained a financing commitment for a $788 million first-lien facility due in September 2024.

Apex Tool soft

In other secondary activity, Apex Tool’s 9% senior notes due 2023 (Caa3/CCC-) fell ¼ point to 96 bid on Friday, a source said.

The bonds traded Thursday as low as 90 bid before improving by the close to 96¼ bid, down slightly from Wednesday’s trades near the 97 bid range and 98 bid area at the start of the week.

The notes were at par in November.

S&P downgraded the company on Wednesday, citing concerns of a possible default.

Apex Tool is a Sparks, Md.-based supplier of professional hand tools and power tools that is owned by Bain Capital, LP.

Evergrande down

China Evergrande’s 8¾% senior notes due 2025 (C/C/C) dropped over 2 points on Friday, trading below a 20 handle at 19 7/8 bid before improving to 20¼ bid, a source said.

The notes were about 3½ points softer on the week.

The Shenzhen, China-based real estate developer said in a filing with the Hong Kong Stock Exchange on Friday that “there is no guarantee that the group will have sufficient funds to continue to perform its financial obligations.”

Evergrande said that as of Friday, it received a demand for $260 million of obligations under a guarantee, and that if the group is unable to meet the obligations, it may lead to creditors demanding acceleration of payment.

Kaisa unchanged

Kaisa’s 9 3/8% senior notes due 2024 (C//CCC-) were quiet after soaring about 4¼ points to 37¼ bid on Thursday, a source said.

The notes are up from where the issue traded at 33 bid a week ago.

Kaisa was downgraded in November following missed interest payments on its 11.7% senior notes due 2025 and 11.95% senior notes due 2023.

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

Distressed index lower

Distressed index returns declined on Thursday after improving in the prior session, according to the latest data available.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return was minus 0.6% versus 1% on Wednesday, minus 0.65% on Tuesday and minus 0.15% on Monday.

Month-to-date returns were 0.39% in the second session of December.

Year-to-date total returns on Thursday posted at 22.25%, compared to 22.99% on Wednesday, 21.77% on Tuesday and 22.57% on Monday.

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