Talen bonds mixed in heavy distressed trading; PBF, Cooper-Standard higher; Exela up

By Cristal Cody

Tupelo, Miss., April 1 – Talen Energy Supply LLC’s bonds traded heavily on Friday as news reports emerged the company was in talks with lenders for a possible bankruptcy.

Talen’s bonds were mixed on the “restructuring” news with more than $100 million of overall volume seen, a source said.

The 10½% senior notes due 2026 dropped 2 points, while the 6½% senior notes due 2025 were up 1 point.

“Yesterday was the big low, but on the week, they’re down 5 points,” a source said of the 6½% notes.

Talen’s credit default swaps spreads moved out more than 5,200 basis points in the past week.

Oil prices ended flat to softer with distressed energy paper including from PBF Energy Inc. about 1¼ points higher in light secondary trading, according to market sources.

“It’s pretty slow,” a source said of the distressed space on Friday and much of the week. “There’s been some movement but not too much.”

The junk market was a touch weaker as stocks improved and volatility declined.

The iShares iBoxx High Yield Corporate Bond ETF ended 1 cent lower at $81.95.

The Chicago Board Options Exchange’s CBOE Volatility index softened 4.52% to 19.63.

In other trading action on Friday, Cooper-Standard Automotive Inc.’s 5 5/8% senior notes due 2026 (Caa2/CCC) moved 2¼ points higher.

Exela Technologies, Inc.’s 11½% first priority senior secured notes due 2026 (Caa3/CCC-) traded over 1 point better after softening on Thursday.

Talen trades heavily

Talen’s notes were mixed in heavy secondary supply totaling over $110 million, according to market sources on Friday.

Talen’s 6½% senior notes due 2025 (Caa2/CCC/CCC) traded 1 point better at 23½ bid after sliding 6¾ points on Thursday.

Volume hit $25 million in the issue on Friday.

Talen’s 10½% senior notes due 2026 (Caa2/CCC/CCC) fell over 2 points to 23 3/8 bid by the day’s end on lighter supply totaling $13 million.

The issue went out on Thursday over 4 points weaker.

Talen’s secured notes saw the heaviest secondary interest on Friday.

The 7¼% senior secured notes due 2027 (B1/B/B) rose ½ point to 93¾ bid on $31 million of supply.

Talen’s CDS spreads widened over 5,200 bps to 15,906 bps in the past week ended Wednesday, a market source said.

The Woodlands, Tex., and Allentown, Pa.-based power company’s CDS spreads have moved out over 11,700 bps since mid-February.

Cooper-Standard gains

Cooper-Standard’s 5 5/8% senior notes due 2026 (Caa2/CCC) jumped 2¼ points to 55½ bid in secondary action on Friday, a market source said.

Trading was steady with over $10 million of volume seen.

The notes have softened over 10 points since mid-February.

Cooper-Standard Holdings Inc., a Northville, Mich.-based supplier of sealing and fluid handling systems and components, reported a wide 2021 fourth-quarter loss.

Exela notes better

Exela Technologies’ 11½% first priority senior secured notes due 2026 (Caa3/CCC-) were quoted Friday afternoon at 48¼ bid, up over 1 point on more than $8 million of secondary volume, a market source said.

The notes were “down 4 points on the week, but these don’t trade too much,” a source said.

Exela reported on Tuesday closing on a $100 million revolving loan exchange and prepayment agreement that included prepaying $50 million under the revolving facility and exchanging $50 million of its 11½% notes due 2026.

The Irving, Tex.-based software and services company in December exchanged the bulk of its 10% senior secured first-lien notes due 2023 (Caa3/CCC-) for the new 11½% first priority senior secured notes due 2026.

Distressed index dips

The S&P U.S. High Yield Corporate Distressed Bond index one-day total return softened on Thursday to minus 0.22%, compared to 0.86% on Wednesday, minus 0.09% on Tuesday and minus 0.18% on Monday.

Month-to-date total returns fell to minus 2.04% from minus 1.82% on Wednesday, minus 2.66% on Tuesday and minus 2.57% at the start of the week.

Year-to-date index returns were minus 5.32% on Thursday, compared to minus 5.11% on Wednesday, minus 5.92% on Tuesday and minus 5.83% on Monday.

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