PBF, Transocean notes higher; Diamond Sports up; Staples strongly traded; Sunac mixed

By Cristal Cody

Tupelo, Miss., Jan. 12 – Energy bonds remained well bid on Wednesday with paper in the distressed space seen about 1¾ points to over 3 points higher.

PBF Energy Inc.’s 7¼% senior notes due 2025 (Caa1/B/B-) traded more than 3 points better.

Transocean Inc.’s paper remained stronger with the 8% debentures due 2027 (C/CCC) up 1¾ points by the close on nearly $10 million of volume.

Talen Energy Supply LLC’s notes also saw gains in thin trading.

Oil prices were stronger again on Wednesday after gaining nearly $3 in the prior session.

West Texas Intermediate crude oil benchmark futures for February deliveries settled $1.42 higher at $82.64 a barrel.

The financial markets saw higher gains on Wednesday with stock indices up and measured market volatility down nearly 5%.

The iShares iBoxx High Yield Corporate Bond ETF picked up another 14 cents after adding 40 cents on Tuesday to finish at $86.48.

Secondary action in Diamond Sports Group LLC’s paper thinned over the day with the sports broadcast group’s secured and unsecured notes trading about ½ point better.

Distressed secondary action overall remained light on Wednesday, according to market sources.

Staples Inc.’s 10¾% senior notes due 2027 (Caa1/CCC+) were the most active in the distressed space by volume with over $17 million of notes traded, a source said.

The issue was up 1 1/8 points and yielding 11.85%.

Meanwhile, Sunac China Holdings Ltd.’s offshore bonds were mixed on Wednesday following news reports the company received a court order to freeze holdings in several subsidiaries.

Shimao Group Holdings Ltd.’s notes also were softer on the heels of downgrades earlier in the week.

China’s property developer space remains distressed with heavy defaults expected in 2022 following defaults late in 2021 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.

PBF bonds gain

PBF’s bonds were seen about 1¾ points to 3 points better on the day, a source said.

The Parsippany, N.J.-based petroleum refiner’s 7¼% senior notes due 2025 (Caa1/B/B-) jumped over 3 points to the 81½ bid area on over $4 million of secondary volume.

PBF’s 6% senior notes due 2028 (Caa1/B/B+) were 1¾ points higher on the day at 73 bid with $3.25 million of paper traded on Wednesday.

Transocean bid higher

Transocean’s bonds continued to move up in the secondary space over Wednesday’s session after rallying on Tuesday, sources said.

The Vernier, Switzerland-based offshore driller’s 8% debentures due 2027 (C/CCC) traded 1¾ points better at 79¾ bid by the close on $9.89 million of secondary activity.

Transocean’s notes were about 2 points to 2¾ points higher on Tuesday.

Talen notes jump

Talen’s 10½% senior notes due 2026 (Caa1/CCC/B-) added 2 points to head out at 47½ bid, a source said.

Supply remained thin at under $1 million.

The Woodlands, Tex., and Allentown, Pa.-based company’s issue was up about ½ point in one trade seen on Tuesday.

Diamond Sports up

Diamond Sports’ 5 3/8% senior secured notes due 2026 (Caa1/CCC) were less than ½ point better at under the 50½ bid area by the afternoon in thin trading, a source said.

The secured issue fell ¾ point to 50 bid on more than $19.5 million of notes traded on Tuesday and dropped 2¾ points to 50¾ bid on over $12 million of volume on Monday.

Diamond Sports’ 6 5/8% senior unsecured notes due 2027 (Ca/CC) also were ½ point better at the 28¾ bid area in light trading on Wednesday.

The Chesapeake, Va.-based sports broadcast group’s unsecured notes sank over 3 points on Tuesday to the 28 bid area on $14 million of volume.

Staples improves

Staples’ 10¾% senior notes due 2027 (Caa1/CCC+) were the most active by volume over the day with over $17 million of notes traded, a source said.

The issue was up 1 1/8 points at 95¾ bid and yielding 11.85%.

The Framingham, Mass.-based office supply chain’s notes have been active so far in the new year with the issue last seen on Friday up 7/8 point at 93¾ bid and yielding over 12% on more than $8.5 million of volume.

Sunac paper mixed

Sunac’s paper was mixed after reports the company received a court order to freeze holdings in several subsidiaries, sources reported.

The company’s 7¼% senior notes due 2022 (B1/BB) rallied 3¼ points to 70 bid on $2 million of supply on Wednesday.

Sunac’s 7.95% senior notes due 2022 (B1/BB) were unchanged at 66 bid.

The issue has shed over 6 points since Friday.

The Tianjin, China-based property developer’s 7½% notes due 2024 (B1/B) also were quoted at 50 bid, down 6½ points from Monday and well off the 75 bid range the issue last traded at in mid-December.

Shimao declines

Shimao’s 4¾% senior notes due 2022 (B2/CCC+/BB) were quoted over 4¼ points weaker at 46½ bid with $2 million of paper changing hands on Wednesday, a source said.

The issue has improved from ending Friday down 3 5/8 points at 45 3/8 bid after the company missed a debt payment.

The issue traded at the 70 bid area at the end of December.

Shimao’s 3.45% unsecured notes due 2031 (B2/CCC+/BB) were last seen on Tuesday down 4 points on the day at 34 bid.

The company was downgraded this week by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings based on weak liquidity and debt financing risks.

The Hong Kong-based holding company focused on property management, development and sales was dropped to pure junk in December.

Distressed returns up

Distressed index returns gained on Tuesday, according to the latest market data.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return rose to 0.35% from minus 0.25% on Monday.

Month- and year-to-date index returns also were better at 0.66% on Tuesday, compared to 0.31% on Monday.

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