Diamond Sports’ secured notes up; Talen mixed in light secondary action; PBF Energy climbs

By Cristal Cody

Tupelo, Miss., April 5 – Distressed issues were mixed Tuesday in light secondary action as market volatility soared over 15% and equities and oil prices moved lower on the day.

Diamond Sports Group LLC’s 5 3/8% second-lien secured notes due 2026 (Caa3/CCC+) gained 1 point after declining ¾ point on Monday.

Talen Energy Supply LLC’s bonds went out mostly flat to 2¼ points better after picking up about 4 points to 5½ points at the start of the week.

The Chicago Board Options Exchange’s CBOE Volatility Index was up 15.13%, at 21.35, by the end of the day.

The iShares iBoxx High Yield Corporate Bond ETF dropped $1.07, or 1.3%, to finish at $81.50.

Oil prices softened but mostly held onto gains from Monday.

West Texas Intermediate crude oil benchmark futures for May delivery, which settled Monday $4.01 higher, declined $1.32 on Tuesday to $101.96.

Active trading in PBF Energy Inc.’s 6% senior notes due 2028 (Caa1/B/B-) on Tuesday sent the notes up 1¼ points.

Diamond Sports mixed

Diamond Sports’ 5 3/8% second-lien secured notes due 2026 (Caa3/CCC+) rose 1 point to 39¼ bid in strong secondary activity after moving ¾ point lower Monday on $7.62 million of supply, a source said.

The notes had $7 million of trading action Tuesday.

Meanwhile, Diamond Sports’ 6 5/8% senior unsecured notes due 2027 (Ca/CCC-) were not active over the day after ending Monday nearly 1 point better at 21½ bid.

The company closed on a distressed debt exchange in March, which included exchanging Diamond Sports’ 5 3/8% senior secured notes due 2026 for the new 5 3/8% second-lien notes.

The Chesapeake, Va.-based sports broadcast group’s distressed debt exchange made it the first media and entertainment default of 2022, according to an S&P Global Ratings notice.

S&P considered it a default, it said, because the company exchanged senior secured first-lien debt for senior secured second-lien debt, or debt with a more junior rank.

Talen flat to higher

Talen’s paper traded mostly unchanged to about 2¼ points better after climbing about 4 points to 5½ points in Monday’s session, a source said.

Talen’s 6½% senior notes due 2025 (Caa2/CCC/CCC) improved 1¼ points to 30 bid on just $1 million of volume.

The issue had climbed over 5 points in Monday’s session after softening more than 6 points in the prior week.

Talen’s 10½% senior notes due 2026 (Caa2/CCC/CCC) were quoted about 2¼ points better on the day at 30 bid.

Secondary supply was light with $2 million of paper changing hands.

The notes jumped 4 points in the prior session after ending last week over 6 points softer.

Talen’s 7¼% senior secured notes due 2027 (B1/B/B) were flat at 94¼ bid in heavier trading supply totaling $13 million on Tuesday. The secured notes are up ½ point from Friday.

The Woodlands, Tex. and Allentown, Pa.-based power generation and infrastructure company’s credit default swaps spreads have widened over 11,700 basis points since mid-February with the company’s CDS spreads ending the prior week at 15,906 bps.

PBF notes up

Petroleum refiner PBF Energy’s 6% senior notes due 2028 (Caa1/B/B-) picked up 1¼ points to head out at 84½ bid on $16 million of paper traded Tuesday, according to a market source.

The Parsippany, N.J.-based company’s notes have climbed 5 points from a week ago.

Distressed returns improve

The S&P U.S. High Yield Corporate Distressed Bond Index one-day total return improved over the second session of April.

The one-day return on Monday was 0.41%, up from zero on Friday.

Month-to-date total returns were 0.41% as of Monday.

Year-to-date index returns improved to minus 4.93% on Monday from minus 5.31% in the April 1 session.

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