Talen higher; Peabody notes decline; Staples steadies; CWT softens; Credito Real down

By Cristal Cody

Tupelo, Miss., June 18 – Talen Energy Supply LLC’s bonds traded higher on Friday but remain softer on the week following Moody’s Investors Service’s negative outlook.

The 6½% senior notes due 2025 (B3/CCC+/B) rose nearly 1 point to 71 bid on more than $1.6 million of trading volume.

On Thursday, the notes fell about ¼ point following a 4¾ point jump on Wednesday.

The issue has drifted from the 72½ bid seen the same day a week ago, the 84½ bid range quoted at the end of May and the 82 bid area from the start of the year.

Talen’s 10½% notes due 2026 (B3/CCC+/B) also gained ¾ point to 76½ bid over the day.

The notes had improved 1¼ points on Thursday after climbing 5¾ points in the prior session.

The notes are off 1 point from the same day a week ago and weaker than the 91 bid posted at the end of May and the 89 bid area seen in early January.

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

Peabody bonds dip

In other distressed energy issues, Peabody Energy Corp.’s bonds declined about 1 to 2 points in heavy trading on Friday, a source said.

The company’s 6 3/8% notes due 2025 (Caa1/CCC) fell 1 point to 73 bid on more than $5.75 million of secondary volume.

The issue traded at 74¾ bid in the same session a week ago and 61 bid in the same day the week prior.

The notes finished May in the 57¾ bid range and traded at the 54 bid area at the start of the year.

Peabody Energy’s 8½% notes due 2024 (Caa1) also fell more than 1 point to 76 bid on $3 million of trading supply Friday.

The notes are about ¾ point softer than a week ago but are up from trading in April at 47¼ bid.

S&P Global Ratings upgraded the St. Louis-based coal producer’s ratings to CCC from SD earlier in June.

The agency said Peabody’s outlook is negative, and it views the company’s recent trade of lower-priority common shares for its 6% senior notes due 2022 as a selective default.

Oil prices improved during the session after softening on Thursday.

North Sea Brent crude oil futures for August deliveries added 43 cents to settle at $73.51 a barrel.

West Texas Intermediate crude oil benchmark futures for July deliveries rose 60 cents to settle at $71.64 a barrel, and August deliveries settled up 51 cents at $71.29 a barrel.

Overall market tone was weaker with major stock indices down, including the Dow Jones industrial average that closed off 1.58%.

The iShares iBoxx High Yield Corporate Bond ETF fell 4 cents to $87.43.

The S&P U.S. High Yield Corporate Distressed Bond index was 0.47% softer on Thursday. The index has month-to-date total returns of 1.81% and year-to-date total returns of 26.77%.

Staples notes flat

Meanwhile, Staples Inc.’s 10¾% senior notes due 2027 (Caa1/CCC+) were flat at 101½ bid in light trading action on Friday, a source said.

The Framingham, Mass.-based office retailer’s notes had softened 0.675 point on Thursday on more than $17 million of trading volume.

CWT bonds slip

Elsewhere, corporate travel management company CWT’s 11½% senior secured notes due 2026 (/CC/) dropped 1 point to 54½ bid during the session, according to a market source.

The issue had climbed to 59¾ bid over the prior week.

The notes from the Minneapolis-based company, formerly known as Carlson Travel Inc., traded at 57¼ bid at the beginning of 2021.

Credito Real weakens

In other distressed issues, Credito Real SAB de CV’s paper was soft in heavy secondary trading on Friday, a market source said.

The company’s 9½% senior notes due 2026 (/BB-/BB) dropped more than 5¼ points to trade at just under 90 bid on more than $5.4 million of secondary supply.

The issue was quoted at the 110 bid range at the year’s start and the 97¼ bid area at the end of May.

Credito Real’s 8% senior notes due 2028 (/BB-/BB) fell 3¾ points on over $3 million of trading action to 84¼ bid on Friday.

The notes started the year at the par area and traded at the end of the prior month at 89½ bid.

Credito Real’s 9 1/8% perpetual subordinated securities (/B-/B+) also were quoted down 3¼ points at 68¾ bid on $10.5 million of trading action.

The issue has declined from the 75¾ bid range seen at the end of May and the 95½ bid area at the beginning of the year.

Credito Real’s bonds have weakened since April after the distressed Mexican automotive subprime lender reportedly revised its 2020 annual statement.

On Thursday, Fitch Ratings downgraded the company’s senior debt rating to BB from BB+ and its perpetual bond ratings to B+ from BB-, noting the company’s weak public information disclosures practices and a need for improved transparency.

Fitch said Credito Real faces potential upcoming refinancing risk challenges from its senior notes due in February 2022.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.