Diamond Sports mixed on bankruptcy talk; distressed secondary supply thin; Coinbase up

By Cristal Cody

Tupelo, Miss., Dec. 20 – Diamond Sports Group LLC’s deeply distressed 5 3/8% senior secured notes due 2026 (Caa2/CCC-) saw strong trading volume on Tuesday that put it among the most active junk names.

The bonds were down ½ point on close to $10 million of secondary volume as chatter circulated of a possible bankruptcy from the sports broadcast group.

The issue was yielding more than 87%.

Diamond Sports’ other paper was higher on the day in lighter trading.

The 6 5/8% senior notes due 2027 (Ca/CC) added 1½ points on $1 million of supply. The yield was 288%-plus.

Overall distressed secondary supply was thin over the session in pre-holiday trading with stronger volume seen in higher credits, a source said.

The junk space was weaker on Tuesday as equities improved and volatility receded.

The iShares iBoxx High Yield Corporate Bond ETF fell 17 cents, or 0.23%, to $74.05.

The CBOE Volatility index declined 4.64% by the afternoon to $21.38.

Coinbase Global, Inc.’s 3 3/8% notes due 2028 (Ba2/BB) edged up about a dime in secondary action totaling more than $8 million on Tuesday. The issue was trading about 3¼ points lower from November.

Coinbase’s bonds and the crypto space has been under pressure following the collapse of FTX Trading Ltd. in November.

Diamond Sports mixed

Diamond Sports’ 5 3/8% senior secured notes due 2026 (Caa2/CCC-) went out Tuesday ½ point lower at 12¾ bid and a yield of more than 87% in strong trading action, a market source said.

Secondary volume totaled about $9.7 million.

The bonds have declined over December after moving in late November at the 17 bid area.

Diamond Sports’ 6 5/8% senior notes due 2027 (Ca/CC) improved during the session by 1½ points, going out at 2 bid on $1 million of trading. The yield was 288%-plus.

In November, Diamond Sports reported heavy third-quarter losses of $1.2 billion, up from a loss of $137 million a year ago.

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

Coinbase edges up

In other distressed paper, Coinbase’s 3 3/8% notes due 2028 (Ba2/BB) added about a dime to head out Tuesday with a 52 handle on more than $8 million of secondary volume, a market source said.

The notes have softened from trading at the 55¼ bid area in November.

Coinbase, a Wilmington, Del.-based cryptocurrency exchange platform, sold $1 billion of the 3 3/8% notes at par on Sept. 14, 2021.

Distressed returns down

S&P U.S. High Yield Corporate Distressed Bond index one-day returns declined on Monday to minus 0.29% from minus 0.76% on Friday and 0.28% in the same session a week ago.

Month-to-date total returns softened to 0.67% on Monday versus 0.97% on Friday and 0.98% in the week-ago session.

Year-to-date total returns widened to minus 24.94% on Monday. Returns were at minus 24.73% on Friday and minus 24.72% in the session a week ago.

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