Diamond Sports up as refinancing chatter grows; CBL notes lower; Transocean, Talen slip

By Cristal Cody

Tupelo, Miss., May 21 – Diamond Sports Group LLC’s bonds gained in light trading in the distressed secondary market on Friday as chatter increases on a potential refinancing from the company.

Diamond Sports Group’s 5 3/8% senior secured notes due 2026 (B2/CCC+) traded about 1½ points higher at the 74½ bid area on volume totaling $1 million, a source said.

Diamond Sports’ 6 5/8% senior notes due 2027 (Caa2/CCC-) improved about ¾ point over the session to the 56½ bid range.

“There has been considerable market chatter about potential financing or refinancing transactions,” according to Covenant Review analysts in a report on Wednesday that examines the company’s first-lien bond indentures. “Many market participants appear to be assuming that any new debt will be senior to the first-lien bonds and loans.”

Diamond Sports has three series of bonds outstanding, including $3.05 billion of the 5 3/8% notes, $1.77 billion of the 6 5/8% notes and $31 million of 12¾% senior secured notes due 2026.

Diamond Sports also is a borrower under a $3.3 billion term loan and a $650 million revolving credit facility, according to the report.

In February, parent Sinclair Broadcast Group, Inc. 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.

CBL notes soften

Bankrupt real estate investment trust CBL & Associates LP’s bonds softened on Friday following court approval of the company’s Chapter 11 bankruptcy disclosure statement, subject to modifications, and request of an extension to file and solicit plan votes.

CBL’s 5¼% notes due 2023 traded late afternoon at 54 bid, down about 2 points from where the notes were last seen on Wednesday, a source said.

CBL’s 5.95% notes due 2026 softened about ¾ point on the day to 54¼ bid.

The company received approval on Thursday for its Chapter 11 plan of reorganization disclosure statement from the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.

The court approval includes requested modifications to the plan with a confirmation hearing scheduled for Aug. 11.

The company also is seeking court approval to extend filing and soliciting votes on its Chapter 11 plan from May 31 to Aug. 30 and the solicitation period from July 29 to Oct. 27, according to a separate court motion on Thursday.

The Chattanooga, Tenn.-based owner and developer of malls and shopping centers and 176 affiliated companies filed for Chapter 11 bankruptcy on Nov. 1 and Nov. 2.

Oil, gas bonds dip

Oil and gas bonds softened as oil prices turned positive on Friday after three consecutive sessions of declines.

Transocean Inc.’s notes traded about 1 point softer over the day, a source said.

The Vernier, Switzerland-based offshore driller’s 7¼% senior notes due 2025 (Ca/CCC) declined just over 1 point to 80½ bid on $3 million of trading supply.

North Sea Brent crude oil futures for July deliveries climbed $1.33 to settle the day at $66.44 a barrel.

West Texas intermediate crude oil benchmark futures for July deliveries settled up $1.64 at $63.58 a barrel.

Overall market tone was mixed.

The iShares iBoxx High Yield Corporate Bond ETF closed up 13 cents at $87.11.

Talen Energy Supply LLC’s bonds remained soft on Friday after declining more than 3½ to over 5 points in heavy distressed secondary trading on Thursday, a source reported.

The Woodlands, Tex., and Allentown, Pa.-based power company’s 10½% notes due 2026 (B3/CCC+/B) traded ½ lower at 91 bid after declining 4¼ points in the prior session.

Endo declines

Looking at the distressed pharmaceuticals space, Endo Finance LLC’s bonds softened in active trading, a source said Friday.

Endo’s 6% senior notes due 2028 (Caa2/CCC+) fell nearly 1¼ points to 71½ bid on $3 million of paper traded.

The notes are down more than 2 points from the same session a week ago.

Parent Dublin-based pharmaceuticals maker Endo International plc reported weaker first-quarter earnings and revenue earlier in May.

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