Cooper-Standard lower on week; WeWork paper softens; Diamond Sports secured notes gain

By Cristal Cody

Tupelo, Miss., Feb. 18 – Cooper-Standard Automotive Inc.’s paper waded into the distressed space with the company’s 5 5/8% senior notes due 2026 (Caa2/CCC) up 1½ points on Friday but 6¾ points softer on the week following the company's weak earnings report Thursday.

WeWork Cos. LLC’s paper also was soft with the 7 7/8% senior notes due 2025 (CCC+/CCC-) flat on Friday but about 1¼ points softer on the week.

WeWork, along with Cooper-Standard, are listed among the largest and most distressed junk names, according to a BofA Securities, Inc. note on Friday.

The financial markets were mixed ahead of the long Presidents Day holiday weekend with stocks lower by the close.

The iShares iBoxx High Yield Corporate Bond ETF rose 12 cents at $82.89.

Oil prices were mixed.

West Texas Intermediate crude oil benchmark futures for March deliveries declined 69 cents to settle at $91.07 a barrel.

Diamond Sports Group LLC’s 5 3/8% senior secured notes due 2026 (Caa1/CCC) gained 1¼ points to head out in the low 40s after softening midweek following the start of the company’s exchange offer for the issue.

Cooper-Standard up

Cooper-Standard’s 5 5/8% senior notes due 2026 (Caa2/CCC) improved 1½ points to 68¼ bid on Friday with over $5 million of issues traded, a source said.

The issue was down 6¾ points from the prior week.

Cooper-Standard Holdings Inc. on Thursday reported fourth-quarter sales declined to $601.2 million from $696.9 million in the fourth quarter of 2020.

The Northville, Mich.-based supplier of sealing and fluid handling systems and components said the company’s loss widened to $102.2 million from a loss of $27.2 million in the year-ago period.

WeWork notes flat

WeWork’s 7 7/8% senior notes due 2025 (CCC+/CCC-) traded as high as 90½ bid on Monday before drifting lower over the week to under the 88½ bid area on Friday, a source said.

The notes were flat on the day and about 1¼ points softer from a week ago.

The issue has declined from the 95 bid area at the start of the year.

WeWork is expected to close its acquisition of Dallas-based Common Desk in March.

The New York City-based flexible office share company began trading on the New York Stock Exchange in October 2021.

Diamond Sports better

Diamond Sports’ 5 3/8% senior secured notes due 2026 (Caa1/CCC) gained 1¼ points to head out Friday at 41¼ bid after softening to a high 30s handle on Wednesday, a market source said.

Secondary action was steady with $3 million of notes traded.

On Tuesday, Diamond Sports’ parent, Sinclair Broadcast Group Inc., announced the start of the solicitation of consents for an exchange offer for all $3.05 billion of the 5 3/8% secured notes and a conditional redemption of its 12¾% senior secured notes due 2026.

The Chesapeake, Va.-based sports broadcast group reported in January that it planned a $600 million new money financing transaction and debt exchange of its term loans and the notes.

Distressed index totals

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return improved on Thursday to minus 0.15%, compared to minus 0.28% on Wednesday.

One-day total returns were 0.39% on Tuesday and minus 0.43% on Monday.

Month-to-date total returns softened to minus 1.09% on Thursday from minus 0.94% on Wednesday, minus 0.67% on Tuesday and minus 1.06% at the week’s start.

Year-to-date returns also were lower on Thursday at minus 2.61%, compared to minus 2.46% on Wednesday, minus 2.19% on Tuesday and minus 2.57% on Monday.

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