Sunac, Agile slide; AMC bonds soften with stock; PBF, Talen drop; Diamond Sports mixed

By Cristal Cody

Tupelo, Miss., Dec. 13 – Junk bonds in China’s property developer space were among the most active issues in the distressed market on Monday in an otherwise mostly quiet session.

“It’s been pretty quiet, especially on the distressed side,” a source said. “Not a lot of movement.”

Sunac China Holdings Ltd.’s paper sank 2 points to over 6¼ points.

Agile Group Holdings Ltd.’s 8 3/8% senior perpetual capital securities (Ba3) dropped over 3¾ points to 62 bid, a source said.

China’s property developer space has weakened following missed bond payments from issuers that include Fantasia Holdings Group Co. Ltd., Sinic Holdings (Group) Co. Ltd., China Properties Group Ltd., Modern Land (China) Co. Ltd. and Sunshine 100 China Holdings Ltd.

In the prior week, China Evergrande Group and Kaisa Group Holdings Ltd. were reported to have defaulted on bond payments and downgraded by Fitch Ratings.

Kaisa’s paper was down 7/8 point on Monday, a source said.

In other secondary activity, AMC Entertainment Holdings, Inc.’s bonds declined, along with its stock.

Market tone was mixed ahead of the Federal Reserve’s policy meeting that ends on Wednesday with stocks lower and measured volatility up nearly 10%.

The iShares iBoxx High Yield Corporate Bond ETF finished flat at $86.63.

Oil prices were soft after ending the prior week over $5 higher.

West Texas Intermediate crude oil benchmark futures for January deliveries fell 38 cents to settle at $71.29 a barrel.

PBF Energy Inc.’s 6% senior notes due 2028 (Caa1/B/B+) traded down nearly 1 point over the day.

Talen Energy Supply LLC’s 10½% senior notes due 2026 (Caa1/CCC/B-) slid over 2 points.

Also Monday, Air Methods Corp.’s 8% senior notes due 2025 (Caa3/CCC) declined over 1 point.

Diamond Sports Group LLC’s notes were flat to about ½ point better after softening in the prior week.

Sunac declines

Sunac’s 7¼% notes due 2022 (B1/B) fell 3 points to 87 bid by the close on Monday on $1 million of paper traded, a source said.

Sunac’s 6½% notes due 2023 (B1/B) slid over 6¼ points to under the 74½ bid area in lighter volume of less than $1 million.

The Tianjin, China-based property developer announced in the previous week that it sold $530 million of American Depositary Shares of KE Holdings Inc. to raise funds for general working capital.

AMC declines

AMC Entertainment’s bonds weakened along with its stock on Monday following disclosures to the Securities and Exchange Commission that its chief executive officer and chief financial officer Sean Goodman sold nearly $10 million of shares in the prior week.

AMC’s 5¾% senior subordinated notes due 2025 (Ca/CCC-) were down about 1 point to under the 78½ bid range by late afternoon, a source said.

The company’s 12% second-lien senior secured notes due 2026 (Ca/CCC-) fell ¼ point to 102½ bid.

AMC’s stock closed down $4.20, or 15.31%, to $23.24 on Monday.

The shares have traded with as high as a $72 handle this year.

According to the SEC filings, AMC CEO Adam Aron sold $9.65 million of stock and CFO Sean Goodman sold over $565,000 of class A common shares on Dec. 7.

The Leawood, Kan.-based movie theater owner’s bonds remain well off the lows seen at the start of the year when the paper traded in the 27 bid to 33½ bid area.

PBF bonds down

Energy bonds in the distressed space were mostly lower as the week kicked off with PBF Energy’s 6% senior notes due 2028 (Caa1/B/B+) down about 1 point to under the 63 bid area, a source said.

The Parsippany, N.J.-based petroleum refiner’s notes saw nearly $1.5 million of volume.

Talen heads lower

Talen’s 10½% senior notes due 2026 (Caa1/CCC/B-) lost over 2 points to trade at the 54 bid range on Monday on $2 million of supply, a source said.

The Woodlands, Tex., and Allentown, Pa.-based power company reported Dec. 2 that it obtained a financing commitment for a $788 million first-lien facility due in 2024.

A week ago, Fitch Ratings placed the company and its bonds on ratings watch negative, noting the facility will stabilize Talen’s liquidity profile but will adversely affect the ratings of its existing debt.

Air Methods slips

New York-based ambulance service provider ASP AMC Holdings Inc.’s 8% senior notes due 2025 (Caa3/CCC) traded over 1 point lower on Monday at under the 83 bid range, a source said.

The notes issued by subsidiaries Air Methods’ and ASP AMC Merger Sub Inc. saw over $1 million of paper traded during the session.

The bonds have edged higher since diving from 94½ bid in October.

Diamond Sports mixed

Diamond Sports’ 5 3/8% senior secured notes due 2026 (Caa1/CCC) were mostly flat at 46¾ bid on Monday, a source said.

The issue has softened from where it traded at 49¼ bid a week ago but remains about 2¼ points stronger month to date.

Diamond Sports’ 6 5/8% senior unsecured notes due 2027 (Ca/CC) traded about ½ point better on Monday at 24¼ bid.

The notes are down 2 points from a week ago but up from the 21 bid area quoted at the end of November.

The Chesapeake, Va.-based sports broadcast group’s bonds rallied earlier in December after parent Sinclair Broadcast Group Inc. reported it inked a multiple-year renewal of its distribution rights agreement with the National Hockey League.

Distressed returns soft

Distressed index daily returns remained soft on Friday.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return was minus 0.02%, compared to minus 0.2% on Thursday, minus 0.59% on Wednesday, 0.58% on Tuesday and 0.34% at the week’s start.

Month-to-date returns declined to 1.58% on Friday from 1.6% on Thursday, 1.8% on Wednesday, 2.4% on Tuesday and 1.81% in the Dec. 6 session.

Year-to-date total returns fell to 23.69% on Friday versus 23.72% on Thursday, 23.96% on Wednesday, 24.69% on Tuesday and 23.98% at the beginning of the week.

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