E.W. Scripps senior notes higher on unit sale chatter; GrafTech secured bonds volatile

By Cristal Cody

Tupelo, Miss., April 24 – E.W. Scripps Co.’s paper climbed on Wednesday with the paper moving off handles in the 50s and 70s and trading around 2 points to over 3 points better this week on chatter the company is shopping its over-the-air network Bounce TV.

The 5 3/8% senior notes due 2031 (Caa2/B-) added 2 points.

Scripps is “hoping to get a nice bounce,” according to a Noble Capital Markets, Inc. research note Wednesday on the potential sale of the network that could take pressure off the company’s high debt leverage.

A potential selling price could be between $165 million and $225 million with proceeds expected to be put toward Scripps’ heavy debt load, which totals nearly $3 billion, Noble Capital Markets senior research analyst Michael Kupinski said in the report.

The deal could take place in the second or third quarter.

First-quarter earnings reports started to swamp the markets with Facebook’s Meta Platforms, Inc., Wyndham Hotels & Resorts and others out Wednesday.

The benchmark 10-year Treasury note yield climbed 6 basis points over the morning and finished up 5 bps at 4.65%.

Stocks were mixed with the S&P 500 index up 0.02%.

The iShares iBoxx High Yield Corporate Bond ETF gave back 17 cents, or 0.22%, to $76.54.

Market volatility was creeping higher over the session.

The CBOE Volatility index, down 9.46% on Monday and 7.38% on Tuesday, increased 1.78% to 15.97 on Wednesday.

In other secondary trading, GrafTech International Ltd.’s bonds were volatile and traded down nearly 3 points to up 8 points on handles in the low 70s ahead of its first-quarter earnings release this week.

The company 9 7/8% senior secured notes due 2028 (B2/B) shed more than 2¾ points.

Scripps bounces

Scripps’ paper gained on Wednesday on more than $14 million of volume, according to market sources.

The company’s 5 3/8% senior notes due 2031 (Caa2/B-) were quoted 2 points higher at 61½ bid, up from 59½ bid in the prior session and the 56½ bid area on Friday.

The notes were active on $8 million of volume reported over the day.

Scripps’ 5 7/8% senior notes due 2027 (Caa2/B-) went into the close stronger at 80 bid on more than $6 million traded.

The bonds improved from 79¾ bid on Tuesday and 76¼ bid on Friday.

Scripps’ Bounce TV, geared toward African American audiences, has doubled in revenue since it was purchased in 2017 to more than $150 million in 2023, Noble Capital Markets senior research analyst Michael Kupinski said in Wednesday’s report.

“As of Dec. 31, 2023, the company had $2.9 billion in debt,” said Kupinski, who lowered the fundamental assessment on Scripps due to its decision to defer the cash payment of its preferred equity. “We believe that the proceeds from the sale likely will be used to pare down debt.”

Scripps operates a portfolio of media brands, including 60 TV stations, as well as digital and cable news networks including Court TV, ION, Defy TV, Grit and Laff, as well as being the steward of the Scripps National Spelling Bee.

The Cincinnati-based company founded in 1878 will release first-quarter earnings results after the markets close on May 9.

GrafTech mixed

GrafTech Global Enterprises Inc.’s 9 7/8% senior secured notes due 2028 (B2/B) traded down over 2¾ points on Wednesday to a 73 bid handle, while GrafTech’s other paper rose, a source said.

Trading in the 2028 tranche totaled $5 million.

The company priced the bonds last June in a $450 million offering at 97.456.

GrafTech Finance, Inc.’s 4 5/8% senior secured notes due 2028 (B2/B) climbed over 8 points to 74¼ bid on $5 million of supply.

The company will release first-quarter earnings results before the market opens on Friday.

GrafTech is listed on BofA Securities Inc.’s distressed excluding default candidate list, made up of junk notes trading at or near distressed levels.

The Brooklyn Heights, Ohio-based graphite electrode products manufacturer is facing issues including employee layoffs and a possible class action securities lawsuit announced in March.

Distressed returns up

S&P U.S. High Yield Corporate Distressed Bond index one-day total returns nearly doubled to 0.64% on Tuesday from 0.33% at the start of the week.

Month-to-date total return losses improved to minus 2.31% from minus 2.94% on Monday.

Year-to-date total return losses dropped to minus 0.23% on Tuesday versus minus 0.87% in Monday’s session.

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