TPC notes remain weak; Diamond Sports erases gains; Kaisa mostly softens after downgrade

By Cristal Cody

Tupelo, Miss., Nov. 16 – TPC Group Inc.’s bonds remained soft on Tuesday with the paper now trading over 15 points lower since releasing weak third-quarter earnings.

Diamond Sports Group LLC’s paper also was down about 1¼ points to 1½ points after sliding over 5 points to 6¼ points on Monday.

Market tone was mostly improved during the session.

The iShares iBoxx High Yield Corporate Bond ETF added 4 cents to close at $86.79.

Oil futures were mixed but little changed.

West Texas Intermediate crude oil benchmark futures for December deliveries fell 12 cents to settle at $80.76 a barrel.

In other distressed secondary trading, the bonds of China property developers continued to soften.

Kaisa Group Holdings Ltd.’s paper declined on the heels of a downgrade from Fitch Ratings following a missed debt payment.

Kaisa joins other issuers in the property development sector with missed payments that includes China Evergrande Group, Fantasia Holdings Group Co. Ltd. and Modern Land (China) Co., Ltd.

TPC Group lower

TPC Group’s 10½% senior secured notes due 2024 (Caa2/CCC-/B-) traded down about ¾ point on Tuesday to head out near the 75¾ bid area, a source said.

The notes fell about 3½ points on Monday.

The Houston-based chemical manufacturer’s issue traded at the 91 bid area a week ago.

TPC announced its third-quarter earnings results on Friday.

Diamond Sports down

Diamond Sports’ bonds were down about 1¼ points to 1½ points after sliding over 5 points to 6¼ points the prior day, a source said Tuesday.

The company’s 5 3/8% senior secured notes due 2026 (Caa1/CCC) declined 1½ points to 50¼ bid after Monday’s loss of over 5 points.

The issue was up about 4½ points in the prior week.

Diamond Sports’ 6 5/8% senior notes due 2027 (Ca/CC) fell about 1¼ points to 25¾ bid on Tuesday.

The notes dropped about 6¼ points on Monday after rallying about 8 points over the prior week after Sinclair announced Nov. 8 that it had taken on the lenders rights and obligations for approximately $184.4 million under Diamond Sports’ existing accounts receivable securitization facility.

Sinclair reported in October that it has continued to seek new funding for the Chesapeake, Va.-based sports broadcast group unit.

Kaisa notes eyed

Kaisa’s 11½% senior notes due 2023 (C//C) fell ½ point to 34 bid on Tuesday after climbing about 8 points in the prior session, a source said.

The company’s 9 3/8% senior notes due 2024 (C//C) were last seen trading on Monday over 4 points better at the 32 5/8 bid range.

On Tuesday, Fitch dropped the homebuilder’s issuer ratings and senior notes to C from CCC- following missed interest payments on its senior notes.

Kaisa has not announced any action on the $58.8 million coupon payment on its 11.7% notes due 2025 that was due on Thursday or its $29.9 million coupon payment on its 11.95% notes due 2023 that was due on Friday, Fitch said.

The Shenzhen, China-based real estate developer also faces $400 million of bonds due in December.

Distressed returns drop

Distressed index returns opened the week soft.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return sank to minus 1.46% on Monday versus 0.25% on Friday and 0.73% in the same session a week ago.

Month-to-date total returns declined to minus 0.09% from 1.38% ahead of the weekend and 0.81% in the week-ago session.

Year-to-date total returns softened to 28.91% on Monday from 30.81% on Friday and 30.07% in the Nov. 8 session.

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