Diamond Sports paper trades on heavy quarterly losses; AMC down; Carvana mostly steady

By Cristal Cody

Tupelo, Miss., Nov. 28 – Diamond Sports Group LLC’s 5 3/8% senior secured notes due 2026 (Caa2/CCC-) saw strong turnover on Monday with the bonds among the most active distressed issues traded.

The notes dropped about ½ point after the issuer reported a heavy $1.2 billion third-quarter loss.

The distressed market also saw lively secondary action on Monday in AMC Entertainment Holdings, Inc.’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-).

The bonds were off about 1¼ points to 1¾ points by the close after rallying 3½ points to 4½ points ahead of the Thanksgiving Day holiday break.

Cyber Monday ended with a weak tone with stock indices down more than 1% and volatility up nearly 10%.

The S&P 500 was off 1.54%.

The CBOE Volatility index rose 8.83% to $22.31.

The iShares iBoxx High Yield Corporate Bond ETF fell 79 cents, or 1.05%, to $74.22.

The number of CCC+ and lower-rated issuers increased to 148 over the last month from 140, according to a S&P Global Ratings report.

Total outstanding debt of issuers rated at CCC+ and below has hit a 17-month high at $96 billion, though the $230 billion debt total remains below its April 2020 peak of $347 billion, S&P said.

The consumer products sector is “most exposed to default risk” with 31 issuers rated CCC+ and lower, according to the note.

U.S.-based logistics services provider Neovia Logistics LP was the lone corporate default last week, after completing a distressed exchange, S&P said in a separate note on Monday.

In other distressed paper, Carvana Co.’s 10¼% senior notes due 2030 (Caa2/CCC) went out mostly flat after trading down ½ point earlier in the session.

Carvana’s notes have given back more than 15 points since the start of the month and were down by more than half since the issue priced at par in April.

Diamond Sports softens

Diamond Sports’ 5 3/8% senior secured notes due 2026 (Caa2/CCC-) dropped about ½ point from where the issue was last seen trading on Wednesday ahead of the holiday break, a source said.

The bonds were quoted at 17 bid on $13.25 million of secondary volume.

Diamond Sports on Monday reported third-quarter losses of $1.2 billion, up from a loss of $137 million a year ago. Revenue declined to $684 million in the quarter ended Sept. 30 from $759 million in the same quarter last year.

Parent Sinclair Broadcast Group Inc. released its third-quarter report on Nov. 2.

Sinclair Broadcast announced earlier in 2022 that it deconsolidated the Chesapeake, Va.-based sports broadcast group from its financial statements.

AMC moves lower

AMC’s 10% senior secured second-lien notes due 2026 (Caa3/CCC-) moved down about 1¼ points to 1¾ points by late in the day, according to market sources.

The notes were quoted down about 1¼ points at 35¾ bid on Monday on more than $17.5 million of secondary volume.

Ahead of the holiday, the notes had gone out 3½ points higher at 37 bid.

The Leawood, Kan.-based movie theater owner and gold and silver mine company’s bonds have dropped about 18 points since the start of the month after ending October about 15 points weaker.

Carvana mostly flat

Carvana’s 10¼% senior notes due 2030 (Caa2/CCC) went out mostly unchanged from Wednesday at 44½ bid in thin trading on Monday, a source said.

The bonds were down ½ point earlier in the day.

The issue has given back more than 15 points since the start of the month.

The Phoenix-based online car retailer priced the notes at par on April 27, 2022 in a $3.28 billion offering.

Carvana’s stock closed Monday down 6.27% at $7.47, well off the 52-week high of $296.70.

Distressed returns positive

S&P U.S. High Yield Corporate Distressed Bond index one-day returns on Friday were 0.24%, up from minus 0.41% at the start of the week.

Month-to-date total returns finished after the holiday at 0.28%, improved from minus 0.72% at the week’s start.

Year-to-date total returns rose to minus 25.47% on Friday, compared to minus 26.2% at the start of the holiday week.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.