Talen bonds trade mostly flat; PBF improves; AMC heads higher; Diamond Sports mixed

By Cristal Cody

Tupelo, Miss., Aug. 10 – Distressed secondary market action slowed on heavy high-grade and junk bond issuance week to date and paper “trading on top of issuance,” a trader said Tuesday.

Secondary trading remained “quiet” over the day with distressed energy bonds trending toward unchanged to better as oil prices settled higher, a source said.

Talen Energy Supply LLC’s bonds were mixed with the 6½% senior notes due 2025 (B3/CCC+/B-) 1/8 point stronger.

PBF Holding Co. LLC’s 9¼% senior secured notes due 2025 (Ba3/BB/BB) were “up ½ point on the day,” a trader said.

AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) climbed another 2 points after picking up 1¼ points following the company’s strong second-quarter revenue report on Monday.

Diamond Sports Group LLC’s paper was mixed after declining Monday following parent Sinclair Broadcast Group, Inc.’s announcement that DISH Network Corp. is expected to drop all 108 of its TV stations.

Talen mostly higher

Talen’s 6½% senior notes due 2025 (B3/CCC+/B-) rose 1/8 point to 62¾ bid on Tuesday, a source said.

The issue has improved month to date after ending July at the 58¾ bid area.

The notes have recouped some of its mid-July losses when the issue traded as low as 55 bid.

The 7 5/8% senior secured notes due 2028 (Ba3/BB-) were unchanged to about ¼ point weaker at 91¼ bid, 92¼ offered on Tuesday, a source said.

The notes are up about ½ point to ¾ point month to date and about 5¾ points better than where it traded in mid-July.

Moody’s Investors Service and Fitch Ratings have the Woodlands, Tex., and Allentown, Pa.-based power company’s outlook at negative.

PBF bonds improve

PBF Holding’s 9¼% senior secured notes due 2025 (Ba3/BB/BB) recovered about ½ point on Tuesday to 88½ bid, 89½ offered after softening ¼ point in the prior session, a trader said.

The bonds are flat from where the issue went out Friday and about 4 points weaker month to date.

The Parsippany, N.J.-based petroleum refiner’s notes traded at the 103 bid area at the start of June and fell below par in July.

AMC sees gains

AMC’s 12% second-lien senior secured notes due 2026 (Ca/C) climbed 2 points to head out at 88 bid in strong secondary activity on Tuesday, a market source said.

The notes added 1¼ points on Monday.

AMC’s paper narrowed losses with the issue down 1¼ points from where it ended July and about 14 points weaker from where the paper closed out June.

The Leawood, Kan.-based movie theater chain on Monday reported stronger second-quarter revenue and lower net losses.

Diamond Sports mixed

Diamond Sports Group’s paper was mixed with the 5 3/8% senior secured notes due 2026 (B2/CCC+) up ¼ point at 58¾ bid on Tuesday, a market source said.

The notes traded about 1½ points weaker on Monday after heading into the weekend at the 60¼ bid range.

Diamond Sports Group’s 6 5/8% senior notes due 2027 (Caa2/CCC-) were about ¾ point weaker in thin trading at the 36¼ bid area after the bonds shed 3 points and sank below 40 bid on Monday.

Parent company Sinclair Broadcast said Monday it is unlikely a carriage agreement with DISH will be reached before the Aug. 16 expiration of the company’s current agreement. DISH is expected to drop all of Sinclair’s TV broadcast channels and tennis channel.

In June, Sinclair reported unsuccessful attempts to secure new funding for Diamond Sports, a Chesapeake, Va.-based sports broadcast group.

Distressed returns weak

Distressed index returns softened at the start of the week.

On Monday, the S&P U.S. High Yield Corporate Distressed Bond index had a one-day total return of minus 0.78%, down from returns of 0.04% on Friday and minus 0.26% in the same session a week ago.

Month-to-date total returns on Monday were minus 1.26%, compared to minus 0.48% on Friday and minus 0.36% in the week ago period.

Year-to-date total returns on Monday were 22.34% versus 23.3% on Friday and 23.45% in the same session in the prior week.

Overall market tone was mixed as oil prices improved.

North Sea Brent crude oil futures for October deliveries rose $1.59 to settle at $70.63 a barrel after declining $1.66 on Monday.

West Texas intermediate crude oil benchmark futures for September deliveries settled up $1.81 at $68.29 a barrel following a $1.80 drop at the week’s start.

October deliveries rose $1.76 to $68.06 a barrel after settling Monday $1.80 lower.

The iShares iBoxx High Yield Corporate Bond ETF closed down 20 cents at $86.98 after declining 20 cents at the start of the week.

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