Bankrupt Diamond Sports paper mounts comeback on possible deal; distressed returns up

By Cristal Cody

Tupelo, Miss., Dec. 20 – Bankrupt Diamond Sports Group, LLC paper is staging a late year rally.

Diamond Sports’ 5 3/8% senior secured notes due 2026 have climbed more than 3 points since Monday after news reports broke that Amazon.com Inc. may acquire streaming rights from the sports broadcaster.

“Diamond Sports is coming to life,” a trader said Wednesday. “Their bonds are definitely up a bit from close to zero value.”

Market tone weakened Wednesday as overall activity slowed ahead of the holidays.

Stock indexes were all higher over the morning but ended the session more than 1% lower.

The S&P 500 index closed down 1.47%.

The CBOE Volatility Index, or ‘Fear Factor index’, climbed 9.1% Wednesday to 13.67.

The iShares iBoxx High Yield Corporate Bond ETF moved up 1 cent, or 0.01%, to $77.21.

Meanwhile, the bond markets on Wednesday were absorbing reports that Citigroup Inc. intends to exit the distressed debt trading space, a source said.

Citigroup also plans to withdraw from the municipal bond market, the source noted.

Diamond Sports gains

Diamond Sports’ 5 3/8% senior secured notes due 2026 rallied to 5 bid, 7 offered in trading Wednesday, a source reported.

The bonds traded at 1½ bid, 2½ offered early Monday before news broke that Amazon.com was considering a deal with the company to offer their sports coverage.

Diamond Sports Group announced March 14 that it filed for Chapter 11 bankruptcy with plans to eliminate approximately $8 billion of debt and become a standalone company from parent Sinclair Broadcast Group, Inc.

In July, Diamond Sports filed a complaint in the U.S. Bankruptcy Court for the Southern District of Texas against its parent company and others over transactions taken against its interests since the issuer was acquired from Walt Disney Co. in August 2019.

The Chesapeake, Va.-based sports broadcast company missed $140 million of interest payments on three tranches of notes due Feb. 15 before the bankruptcy filing.

Distressed returns stronger

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns improved Tuesday to 0.39% compared to 0.02% on Monday.

Month-to-date total returns increased to 6.07% in the prior session from 5.66% at the week’s start.

Year-to-date distressed total returns also hit 22.02% on Tuesday, up from 21.54% on Monday.

© 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.