Talen Energy notes mixed; PBF wilts; Energy Transfer up; Staples, Washington Prime down

By Cristal Cody

Tupelo, Miss., June 17 – Talen Energy Supply LLC’s bonds traded mostly better on Thursday after the paper rallied about 1½ points to 5¾ points in the prior session following Moody’s Investors Service’s negative outlook.

The 6½% senior notes due 2025 (B3/CCC+/B) fell about ¼ point to the 70 bid area in light trading after climbing 4¾ points on Wednesday, a source said.

The issue has softened from the 84½ bid range at the end of May and the 82 bid area at the start of the year.

Talen’s 10½% notes due 2026 (B3/CCC+/B) improved 1¼ points to head out at 75½ bid in heavy trading after climbing 5¾ points in the prior day.

The notes ended May at 91 bid, while trading at the 89 bid area in early January.

Moody’s dropped The Woodlands, Tex., and Allentown, Pa.-based power company’s outlook to negative from stable on Wednesday.

Energy bonds eyed

Bonds in the energy space were mixed on Thursday.

Petroleum refiner PBF Holding Co. LLC’s 6% senior notes due 2028 (B3/B+/B+) fell more than 2¾ points to 71¾ bid on over $2 million of trading supply over the day, a source said.

Dallas-based gas supplier Energy Transfer LP’s paper traded mostly higher, a source reported.

The company’s 6¼% series A perpetual securities (/BB/) rose 2 1/8 points to 89 5/8 bid in light trading.

Oil prices declined on Thursday.

North Sea Brent crude oil futures for August deliveries fell $1.31 to settle at $73.08 a barrel.

West Texas intermediate crude oil benchmark futures for July deliveries settled $1.11 lower at $71.04 a barrel, and August deliveries dropped $1.17 to settle at $70.78 a barrel.

Overall market tone was mixed.

The iShares iBoxx High Yield Corporate Bond ETF closed up 6 cents to $87.47.

Staples notes weaken

Elsewhere in heavy secondary market action on Thursday, Staples Inc.’s 10¾% senior notes due 2027 (Caa1/CCC+) saw over $17 million of trading volume, a source said.

The Framingham, Mass.-based office retailer’s notes fell 0.675 point to 101½ bid on a yield of more than 10%.

Diamond Sports lower

Diamond Sports Group LLC’s 5 3/8% senior secured notes due 2026 (B2/CCC+) declined 1¾ points to 69¾ bid in light trading totaling $1.6 million on Thursday, a source said.

The notes are trading 4¼ points softer week to date.

The Chesapeake, Va.-based sports broadcast group’s bonds remain active on chatter of potential financing or refinancing transactions.

In February, parent Sinclair Broadcast Group, Inc. reported soft guidance for the company, along with an interest in liability management initiatives that could include a debt exchange or redemption.

Washington Prime dips

Washington Prime Group, LP’s notes softened on Thursday after seeing gains in the prior three sessions following the company’s weekend Chapter 11 bankruptcy filing, a source said.

The 6.45% notes due 2024 (C/D/CC) fell 1¼ points to 75 bid on $8 million of secondary supply over the day.

Week to date, the notes climbed to the 73½ bid range on Monday from the 64½ bid area ahead of the weekend, traded up 2 points on Tuesday and added 1¼ points on Wednesday.

Washington Prime Group Inc. announced it filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas on Sunday.

The company had been in a forbearance agreement since March 16 over a missed payment on the 6.45% notes.

The Columbus, Ohio-based shopping center real estate investment trust disclosed in February that its operating partnership withheld a $23.2 million interest payment that was due Feb. 15.

The company plans to restructure its corporate-level debt, either through a full equitization of its unsecured notes or an alternative value-maximizing transaction that would repay in full in cash all of its corporate debt.

Washington Prime is continuing business operations with a $100 million non-amortizing multiple draw super-priority senior secured debtor-in-possession term loan facility from the consenting creditors.

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