Altice distressed paper pressured; Diamond Sports range-bound; rate cut chatter grows

By Cristal Cody

Tupelo, Miss., April 17 – Altice France Holding Restricted Group’s paper remained pressured on Wednesday with the distressed bonds trading around ¼ point to nearly 2 points weaker as the company undergoes debt negotiation talks.

The 10½% senior notes due 2027 (Ca/CCC-) had dropped 1½ points by the afternoon but gained some ground to head out ¼ point lower on the day, though still offering a yield of nearly 51% with the paper down around 30 points since March.

In other distressed trading, Diamond Sports Group, LLC’s paper has stayed mostly range-bound at 3 bid or lower in April and was flat on Wednesday as the company reported court approval of its Chapter 11 bankruptcy disclosure statement.

The 5 3/8% senior secured notes due 2026 had climbed to near double digits in January but have since settled lower.

Distressed secondary supply was lighter over the session with $170 million of reported volume, down from $180 million on Tuesday and $171 million on Monday.

Stocks continued to stay soft a third day with indices all closing lower, and Treasury yields retreated from increases on Monday and Tuesday.

The S&P 500 index declined 0.58%, while the iShares iBoxx High Yield Corporate Bond ETF finished a dime better at $75.78.

The 10-year Treasury note yield shed 7 basis points during the session to 4.58%.

While chatter of potentially no rate cuts at all this year has permeated the markets since March inflation data was released, Piper Sandler & Co. analysts think that will change in the second half of the year.

“Currently, the market anticipates less than two rate cuts by the end of the year, rendering the prospect of four to six rate cuts virtually unthinkable, especially after the March CPI report,” according to Piper Sandler’s second-quarter bond market outlook report released Wednesday.

“Despite the current restrictive monetary policy and recent shifts in rate cut expectations, historical patterns suggest significant easing in the latter half of 2024,” Piper Sandler said. “This could result in up to six rate cuts, driving 10-year yields below 4%. Long-term bonds currently offer an attractive opportunity as the prospect for higher yields will diminish by year's end.”

Altice bonds down

Altice France Holding SA’s 10½% senior notes due 2027 (Ca/CCC-) were down 1½ points to a quote of 39 bid by the afternoon but pulled back off some of the losses by the close, sources said Wednesday.

The issue headed out the door ¼ point lower on the day at 40¼ bid on $13 million of volume.

Altice France SA’s 8 1/8% senior secured notes due 2027 (Caa1/CCC+) declined 1¾ points to 74¼ bid over the afternoon on $17 million of secondary action.

The 5½% senior secured notes due 2028 (Caa1/CCC+) were down 1 7/8 points to 65 bid on $13 million traded by the close.

Altice’s 6% senior notes due 2028 (Ca/CCC-) also were busy on Wednesday. The bonds declined more than ¾ point to 30 5/8 bid on $9 million of volume.

The Paris-based telecommunications company’s bonds started the deep slide in March after Altice France lowered its guidance and highlighted potential haircuts for debt holders to reduce its leverage.

Diamond Sports flat

Diamond Sports’ 5 3/8% senior secured notes due 2026 were lightly traded with only about $1 million of volume seen on Wednesday with the bonds unchanged at 2 7/8 bid, a market source said.

The issue has been thinly traded over the month.

The bonds traded as high as the 8 bid, 9 offered area in January after the bankrupt sports broadcaster announced a restructuring support agreement with its parent company and creditors along with a minority investment from Amazon.com for Prime sports coverage broadcasts.

Diamond Sports reported on Wednesday it received approval of the disclosure statement for its Chapter 11 bankruptcy plan filed with the U.S. Bankruptcy Court for the Southern District of Texas.

Amazon has committed to provide the debtors with a new money investment through $115 million principal amount of convertible B exit notes to support the reorganization.

In addition, some participating creditors have committed to provide a $450 million subordinated secured super-priority DIP facility.

The plan confirmation hearing is scheduled for June 18.

Diamond Sports also received an extension through Sept. 16 for the exclusive plan filing period and an extension of the exclusive solicitation period through Nov. 14.

Diamond Sports filed for Chapter 11 bankruptcy on March 14, 2023 and also had filed a complaint against parent Sinclair Inc. and others over transactions taken against its interests since it was acquired from Walt Disney Co. in August 2019.

The Chesapeake, Va.-based sports broadcast company reached a settlement with Sinclair to settle the pending litigation in a structure that included receiving $495 million in cash.

Distressed index drops

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns slid in the weak market tone on Tuesday to negative 1¼% from minus 0.52% on Monday.

Month-to-date total declined to negative 2.99% versus negative 1.76% at the week’s start.

Year-to-date total returns fell to negative results with 0.92% reported for Tuesday, down from 0.34% 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.