Diamond Sports up; Bed Bath & Beyond slides; Exela down; PBF better; Shimao, Sunac lower

By Cristal Cody

Tupelo, Miss., Jan. 7 – Diamond Sports Group LLC’s notes traded up less than 1 point on Friday as the most active distressed issuer seen over the session.

“There’s not a lot of outperformers,” a source said. “It’s been pretty quiet. Diamond Sports was up maybe ¾ point.”

Diamond Sports Group’s paper improved on $13 million of secondary supply.

Trading action over the week and over Friday’s session was concentrated in higher-rated junk issues and split-rated bonds trading in the high 90s or over par, sources report.

Staples Inc.’s 10¾% senior notes due 2027 (Caa1/CCC+) were up 7/8 point at 93¾ bid and yielding over 12% on more than $8.5 million of trades on Friday, a source said.

The Framingham, Mass.-based office supply chain’s notes are about 1½ points better since mid-December.

Bed Bath & Beyond Inc.’s bonds dropped about 2¾ points to nearly 3 points on Friday and 8 points on the week following a disappointing third-quarter earnings announcement on Thursday.

Exela Technologies, Inc.’s 11½% first priority senior secured notes due 2026 gave back gains from the start of the week.

Energy paper mostly quieted on Friday as oil prices softened.

West Texas Intermediate crude oil benchmark futures for February deliveries fell 56 cents to settle at $78.90 a barrel, $3.69 higher on the week.

PBF Energy Inc.’s paper was quoted about ½ point higher on the day.

Overall market tone was soft following a weak jobs report.

The Labor Department said Friday that U.S. December non-farm job numbers rose by a seasonally adjusted 199,000, much lower than the 450,000 analysts forecasted.

The unemployment rate fell 0.3 percentage point to 3.9%, beating market expectations of a 4.1% rate.

The iShares iBoxx High Yield Corporate Bond ETF declined 22 cents to end Friday at $85.87.

In other distressed trading, Shimao Group Holdings Ltd.’s notes sold off with the paper down 3 5/8 points on Friday on reports the company failed to make a debt payment.

The space has seen defaults late in the year from issuers including China Evergrande Group, Kaisa Group Holdings Ltd., Fantasia Holdings Group Co. Ltd., Sinic Holdings (Group) Co. Ltd., China Properties Group Ltd., Modern Land (China) Co. Ltd. and Sunshine 100 China Holdings Ltd.

Sunac China Holdings Ltd.’s offshore bonds also dropped 2 5/8 points over the day.

Diamond Sports moves up

Diamond Sports’ 5 3/8% senior secured notes due 2026 (Caa1/CCC) recovered ¾ point in secondary trading on Friday to hit 50 bid, sources said.

The notes attracted $13 million of secondary volume as the most active distressed issuer seen during the session.

The issue slid 1½ points on Thursday, was unchanged in the prior two sessions and traded ¾ point better on Monday.

The Chesapeake, Va.-based sports broadcast group entered into a multiple-year renewal of its distribution rights agreement with the National Hockey League in December.

Bed Bath drops

Bed Bath & Beyond’s 5.165% notes due 2044 (B1/B+) fell nearly 3 points to 74 bid on Friday on $9 million of secondary supply, a source said.

The notes traded as low as 73¾ bid and as high as 75½ bid during the session.

The bonds have slid 8 points this week.

The retailer’s 4.915% notes due 2034 (B1/B+) also were down 2¾ points at 81¼ bid in thin action of less than $1 million during the session.

The Union, N.J.-based home products retailer reported Thursday a third-quarter loss of $276 million, up from a loss of $75 million in the year-ago period. Sales declined 28% to $1.88 billion from $2.62 billion in the same quarter in 2020.

Exela notes soften

Exela Technologies’ 11½% first property senior secured notes due 2026 (Caa3/CCC-) declined 2 3/8 points to 70 bid on $1 million of paper traded on Friday, sources said.

“They’re just calming down,” one source said.

The notes had rallied nearly 5¼ points to 76 3/8 bid on Monday after closing out the previous week at 71 1/8 bid.

In December, the Irving, Tex.-based software and services company completed a distressed debt exchange of its 10% senior secured first-lien notes due 2023 (Caa3/CCC-) for the new 11½% first priority senior secured notes due 2026.

Shimao declines

Shimao’s 4¾% notes due 2022 (B) slid 3 5/8 points to 45 3/8 bid in light activity of less than $1 million on Friday, a market source said.

The company’s 3.45% notes due 2031 were quoted down 3 3/8 points at 34¾ bid by the close.

Shimao’s paper has been on the decline since the prior month.

The Hong Kong-based holding company focused on property management, development and sales was dropped to pure junk in December by Fitch Ratings and downgraded by Moody’s Investors Service.

Sunac notes down

Sunac’s 7.95% notes due 2022 (B1/B) dropped 2 5/8 points to 71 7/8 bid during the session, a source said.

Trading was active with $3 million of paper changing hands.

The Tianjin, China-based property developer sold $530 million of American Depositary Shares of KE Holdings Inc. in December to raise funds for general working capital.

Distressed returns dip

Distressed index returns softened on Thursday, according to the latest market data.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return fell to minus 0.22% from 0.09% on Wednesday, 0.6% on Tuesday and 0.38% on Monday.

Month- and year-to-date index returns were 0.86%, compared to 1.08% on Wednesday, 0.99% on Tuesday and 0.38% on Monday.

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