Talen bonds eyed; AMC declines; Endo volatile; PBF, Diamond Sports improve; Sunac mixed

By Cristal Cody

Tupelo, Miss., Dec. 15 – Talen Energy Supply LLC’s paper stood out in the distressed market on Wednesday as a note came due.

A “lot of eyeballs” watched the paper as traders wondered if Talen was going to refinance or pay the coupon on its $114 million outstanding of 4.6% senior notes due Dec. 15, 2021 with no clear answers by the session’s close, a source said.

Talen’s notes traded about 1 point to 2 points lower.

AMC Entertainment Holdings, Inc. was another “pretty active” name on Wednesday, a source said.

“It’s down 4 points,” the source said. “Most reopening trades have been a little weaker. There’s a lot of equity trades going on with AMC. It’s been a huge risk-off trade with all these meme names.”

Endo International plc’s bonds also “were pretty volatile today,” another source said. “Lot of trading.”

The 6% senior notes due 2028 (Caa3/CCC-) saw heavy volume following reports that a California trial court issued a final ruling that Endo’s subsidiaries are not liable for opioid claims and that Eagle Pharmaceuticals, Inc. received approval of a generic drug cleared by a court of infringement on Endo’s patents.

Mallinckrodt plc’s notes saw little to no trading action over the day, the source said.

Equities improved after the Federal Reserve released its monetary policy statement on Wednesday with the Nasdaq ending 2.15% higher.

Following the Fed’s release, the stock market “rallied hard,” a source said. “It was a little bit late in the day for bonds, but stocks rallied a ton.”

The iShares iBoxx High Yield Corporate Bond ETF jumped 33 cents to $86.81.

Oil prices were modestly higher after remaining soft on Monday and Tuesday.

West Texas Intermediate crude oil benchmark futures for January deliveries settled up 14 cents at $70.87 a barrel.

PBF Energy Inc.’s 7¼% senior notes due 2025 (Caa1/B/B-) improved over 1 point during the session.

In other distressed issues, Diamond Sports Group LLC’s unsecured notes rose 1 point to trade about 1½ points better so far in the week.

In China’s property developer space, Sunac China Holdings Ltd.’s offshore bonds were mixed with its two-year notes trading 1¼ points higher to 6 points lower on the day.

Talen declines

About $1 million of Talen’s 4.6% notes due Dec. 15, 2021 (Caa1/CCC/B-) traded on Wednesday 1 point lower at 95 5/8 bid, a source said.

The company’s 6 5/8% senior secured notes due 2028 (B1/B+/B+) were active and down about 1 point at 89¼ bid.

Talen’s 10½% senior notes due 2026 (Caa1/CCC/B-) also declined about 2 points to 51½ bid in thin late afternoon volume.

The Woodlands, Tex., and Allentown, Pa.-based power company reported Dec. 2 that it obtained a financing commitment for a $788 million first-lien facility due in 2024, with closing expected in mid-December.

On Dec. 6, Fitch Ratings placed the company and its bonds on ratings watch negative, noting the credit facility will stabilize Talen’s liquidity profile but will adversely affect the ratings of its existing debt.

AMC bonds drop

AMC Entertainment’s bonds dropped over 4 points in the secondary market on Wednesday, sources reported.

The company’s 10% senior secured second-lien notes due 2026 (Ca/CCC-) fell 4 3/8 points to 97 bid on $9 million of secondary action.

The Leawood, Kan.-based movie theater owner’s bonds have been soft over the past three sessions following disclosures last week that its chief executive officer and chief financial officer sold a combined $10 million of shares and as the Omicron variant of Covid-19 spreads through the country.

Endo bonds active

Endo Finance LLC’s 6% senior notes due 2028 (Caa3/CCC-) opened the day around 75 bid and headed out at 74¾ bid, a source said.

The notes were up slightly on the day after shedding over 2½ points to trade under 74½ bid on Tuesday.

Endo’s bonds were heavily traded on announcements on Wednesday that a California trial court issued a final ruling that the company’s subsidiaries are not liable for opioid claims and from Eagle Pharmaceuticals that it received government approval of a generic drug.

Eagle Pharmaceuticals said the U.S. Food and Drug Administration approved its application for a generic blood pressure drug following a court ruling earlier this year that its product does not infringe upon the patents held by Endo.

Endo’s paper was lower on Tuesday after Texas’ attorney general announced an investigation into the company’s subsidiarity and AbbVie Inc. (Baa2/BBB+) over the advertisement and promotion of hormone puberty blockers for unapproved uses without disclosing potential risks.

The Dublin-based pharmaceutical maker announced in September that the company and its subsidiaries reached agreements to settle opioid-related lawsuits in Louisiana and New York, following a $35 million settlement in Tennessee announced in July.

Sunac mixed

Sunac’s paper was mixed with the 7.95% notes due 2022 (B1/BB-) up 1¼ points at 80¼ bid on Wednesday, a source said.

The issue attracted $1 million of volume.

Sunac’s 7¼% notes due 2022 (B1/B) sank 6 points to 81 bid on heavier volume of $4 million over the session.

The Tianjin, China-based property developer reported a week ago that it sold $530 million of American Depositary Shares of KE Holdings Inc. to raise funds for general working capital.

PBF better on day

PBF Energy’s 7¼% senior notes due 2025 (Caa1/B/B-) rose over 1 point to the 70 bid area on $4.5 million of secondary supply on Wednesday, a source said.

The Parsippany, N.J.-based petroleum refiner’s notes have softened nearly 10 points from a month ago.

Diamond Sports up

Diamond Sports’ 6 5/8% senior notes due 2027 (Ca/CC) picked up 1 point to hit 25½ bid on $4 million of bond volume on Wednesday, a source said.

The issue is up about 1½ points this week and about 4½ points month to date.

Parent Sinclair Broadcast Group Inc. reported on Dec. 2 that Diamond Sports inked a multiple-year renewal of its distribution rights agreement with the National Hockey League.

The Chesapeake, Va.-based sports broadcast group’s networks serve as the televised home to more than half of all U.S.-based MLB, NHL and NBA teams.

Distressed index soft

Distressed index daily returns fell on Tuesday.

The S&P U.S. High Yield Corporate Distressed Bond index saw one-day total returns slide to minus 0.44% from 0.02% on Monday.

Month-to-date returns declined to 1.15% on Tuesday from 1.59% at the start of the week.

Year-to-date total returns softened to 23.17% from 23.71% on Monday.

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