Diamond Sports gains; Hertz notes mixed on rival bids; W&T, Navios notes active

By Cristal Cody

Tupelo, Miss., May 5 – Diamond Sports Group LLC’s paper climbed 3¾ to 4¾ points in heavy volume and was among the most active issues in the distressed market over Wednesday’s session.

The 5 3/8% senior secured notes due 2026 (B2/CCC+) were quoted at 74¾ bid, up 4¾ points on more than $26.5 million of secondary volume, a source said.

The notes had dropped nearly 3 points to 70 bid on under $2 million of paper traded on Tuesday.

Diamond Sports’ 6 5/8% senior notes due 2027 (Caa2/CCC-) also added 3¾ points to hit 55¼ bid on $26 million of paper traded.

The notes were down 1¼ points on $6 million of secondary supply in the prior session.

The company’s bonds climbed following the release Wednesday of better-than-expected first-quarter results from parent Sinclair Broadcast Group, Inc.

Sinclair also announced on Wednesday a quarterly cash dividend of 20 cents per share on its class A and B common stock.

Sinclair reported it has $12.54 billion of total debt as of March 31, which includes $8.12 billion of debt from Diamond Sports.

In February, Sinclair reported soft guidance for the Chesapeake, Va.-based sports broadcast group along with an interest in liability management initiatives that could include a debt exchange or redemption.

Hertz mostly softens

Hertz Corp.’s bonds headed out mixed in the distressed secondary market on Wednesday after the parent company announced a rival offer to fund its Chapter 11 plan of reorganization is the “superior proposal.”

The company’s 6¼% senior notes due 2022 fell about 2 points to the 103 bid area, a source said.

The notes have climbed from trading in the 52 bid range at the start of 2021.

Hertz’s 7% senior notes due 2028 climbed to 98 bid in light trading action after declining about 1½ points to 94½ bid on Tuesday.

The issue has improved from trading in the 48 bid range as the year opened.

Hertz’s 5½% notes due 2024 also were down 1 point at 105 bid on Wednesday, a market source said.

The notes traded at the start of the year at 53½ bid.

Hertz Global Holdings, Inc. said Wednesday in a news release that the revised proposal made by affiliates of Knighthead Capital Management LLC, Certares Opportunities LLC and Apollo Capital Management, LP to provide equity capital required to fund its exit from Chapter 11 is superior to the previous proposal with its current and existing plan sponsors, affiliates of Centerbridge Capital Partners, LP., Warburg Pincus LLC and Dundon Capital Partners, LLC.

The Estero, Fla.-based car rental operator said it will comply with bankruptcy court procedures established in an April 28 order to establish bidding and auction procedures on the submission of alternative plan proposals, among other criteria.

If the current plan sponsors inform Hertz by Friday of a counteroffer, then the company said it will proceed with an auction on Monday.

Hertz said in a statement on Tuesday the rival proposal considers funding Hertz's plan of reorganization through direct common stock investments totaling $2.9 billion, direct preferred stock investments totaling $1.5 billion and a rights offering to raise $1.36 billion.

The revised proposal also includes an amended plan of reorganization that contemplates payment in full of all secured and unsecured funded debt and provides holders of common stock with 50 cents per share in cash and either 10-year warrants for an aggregate of 10% of the reorganized company or, for eligible stockholders, the possibility of subscribing for shares of common stock in the rights offering.

The company filed for Chapter 11 bankruptcy on May 22, 2020 in the U.S. Bankruptcy Court for the District of Delaware.

W&T, Navios better

Oil prices were mixed.

North Sea Brent crude oil futures for June deliveries rose 8 cents after settling unchanged in the prior three sessions to $68.96 a barrel on Wednesday.

West Texas Intermediate crude oil futures for June deliveries fell 6 cents to settle at $65.63 a barrel.

Houston-based oil and gas producer W&T Offshore Inc.’s 9¾% senior secured notes due 2023 (Caa2/B) were quoted trading about ½ point better at 89¼ bid on Wednesday on nearly $21 million of secondary volume, a source said.

Overall market tone was mostly stronger.

The iShares iBoxx High Yield Corporate Bond ETF closed Wednesday up 17 cents at $87.30.

Greek shipping and logistics company Navios Maritime Acquisition Corp.’s 8 1/8% first priority ship mortgage notes due 2021 (Caa1/CCC) improved 1¼ points to 76¾ bid on over $3.5 million of secondary supply, a source said.

Envision bonds advance

Distressed health care paper also saw some gains during the session.

Nashville-based Envision Healthcare Corp.’s 8¾% senior notes due 2026 (Ca/CC) rose 1¼ points to 73½ bid on more than $3.5 million of secondary supply, a source said.

Meanwhile, bankrupt pharmaceuticals maker Mallinckrodt plc’s bonds remained soft.

The company’s 5¾% notes due 2022 declined 2 points to 63 bid on $2.25 million of secondary volume after dropping 3 points in the previous session on $3 million of trading supply, a source said.

Mallinckrodt filed its Chapter 11 plan of reorganization and disclosure statement in the U.S. Bankruptcy Court for the District of Delaware on April 20.

A hearing on the plan is scheduled for May 26.

Mallinckrodt, which has principal offices in Dublin and St. Louis, filed for Chapter 11 bankruptcy on Oct. 12, 2020.

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