Mallinckrodt, Diamond Sports notes trade up; Texas storm-hit Talen, Nine Energy decline

By Cristal Cody

Tupelo, Miss., March 11 – Bankrupt pharmaceuticals maker Mallinckrodt plc’s bonds traded 4 to more than 5 points higher on Thursday after the company announced the previous day it reached an agreement to pursue a plan of reorganization.

A source saw the company’s 5¾% senior notes due 2022 up 5¾ points at 66½ bid on $13 million of trading volume.

Mallinckrodt’s 4¾% senior notes due 2023 traded up 4 points to 13 bid on nearly $5 million of secondary supply during the session.

Mallinckrodt (/D/) filed for Chapter 11 bankruptcy in October in the U.S. Bankruptcy Court for the District of Delaware.

On Wednesday, Mallinckrodt announced it reached agreement with a group of first-lien term lenders holding $1.3 billion of its outstanding first-lien term loans to support the company’s restructuring support agreement.

The company received approval on Feb. 25 to extend filing a bankruptcy restructuring plan until Aug. 9.

Diamond Sports better

Diamond Sports Group LLC’s bonds traded higher in heavy secondary supply on Thursday, recovering after softening Monday following a downgrade by Moody’s Investors Service.

The company’s 5 3/8% senior secured notes due 2026 (B2/CCC+) rose 1¾ points to 72¾ bid on more than $26 million of trading volume, a source said.

Parent company Sinclair Broadcast Group, Inc. reported in February soft guidance for the sports broadcast group and an interest in liability management initiatives that could include a debt exchange or redemption.

On Monday, Moody’s cited a negative outlook for the issuer over uncertainty surrounding renewing carriage contracts with DISH, Hulu and YouTube.

Storm-impacted issuers off

Overall market tone remained better with major stock indices closing higher after president Joe Biden signed a $1.9 trillion Covid-19 stimulus bill, the American Rescue Plan Act of 2021, into law on Thursday. The Nasdaq finished up 2.52%.

The iShares iBoxx High Yield Corporate Bond ETF rose 32 cents, or 0.37%, to end at $86.70.

Oil futures jumped more than $1.50 over the session.

West Texas intermediate crude oil for May deliveries settled $1.58 higher at $66.02 a barrel.

North Sea Brent crude oil futures for May deliveries climbed $1.73 to settle at $69.63 on Thursday.

In the secondary market, Talen Energy Supply LLC’s 6½% senior notes due 2025 (B3/CCC+/B) fell 1 point to 83 bid ahead of the company’s aftermarket conference call to discuss its fourth-quarter and year-end earnings results, a source said.

The notes were flat on Wednesday.

Talen Energy also was expected to provide an update on the impacts of the February winter storm that caused widespread power outages and record energy pricing in Texas.

Houston-based oilfield services company Nine Energy Service, Inc.’s 8¾% notes due 2023 (Caa2/D) were quoted more than 1¼ points weaker at 51½ bid on Thursday in light trading volume, a source said.

On Monday, Ann Fox, president and chief executive officer of Nine Energy, said in a news release that the February winter storm caused major shutdowns within all its service lines in Texas.

Excluding the Texas weather-related shutdowns, Fox said Nine Energy anticipates the pace of first-quarter revenue activity will be better than the fourth quarter, but it expects to generate a net loss and negative adjusted EBITDA for the quarter.

The company on Monday reported fourth-quarter revenue of $62 million and a net loss of $35.4 million for the period ended Dec. 31.

Transocean, Shelf Drilling up

In other distressed energy issues active on Thursday, Transocean Inc.’s bonds traded about 3 to 4 points better, a source said.

The offshore driller’s 7½% senior notes due 2031 (C/CCC-/) added 4 points to head out at 55 bid.

Transocean Ltd.’s 6.8% senior notes due 2038 (Ca/CCC-) rose 3¼ points to 50¾ bid during the session.

Shelf Drilling Holdings Ltd.’s 8¼% senior notes due 2025 (Caa3/CCC+) also traded 2¾ points better to hit 77½ bid after heading out Wednesday flat, a source said.

The company plans to price $300 million of senior secured notes due 2024 to in part redeem all of its 8¾% senior secured notes due 2024.

AMC heads higher

Meanwhile, AMC Entertainment Holdings, Inc.’s 12% second-lien senior secured notes due 2026 (Ca/C) rose 2½ points to 86 bid after the company reported weak earnings in the prior session, according to a source.

Secondary supply was busy with nearly $14 million of issues traded.

AMC’s bonds have rallied since January after the company raised additional funding and on the reopening of theaters earlier in March.

The 12% notes traded at 27 bid in January.

AMC reported Wednesday that as of March 5, it was operating about 527 of its 589 domestic locations and 78 of its 356 international locations.

AMC posted a fourth-quarter loss of $946.1 million for the period ended Dec. 31, compared to a loss of $13 million in the same period a year ago.

Exela notes slip

Elsewhere, Exela Technologies, Inc.’s bonds gave back some gains in secondary trading on Thursday, according to a market source.

The company’s 10% senior secured notes due 2023 (Caa3/CCC-) fell 2¼ points to 37 bid.

The notes, issued by debt financing arm Exela Intermediate LLC, climbed 6¼ points over the prior two sessions after the company announced Tuesday that it secured a $90 million 10-year contract.

Exela, an Irving, Tex.-based business process automation company, reported it will manage claims and correspondence for an unnamed major U.S. health insurance company through its PCH Global digital exchange platform.

© 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.