Altera, TPC notes sink in November; Diamond Sports soft; Talen Energy, PBF edges up

By Cristal Cody

Tupelo, Miss., Nov. 17 – Some distressed issuers saw continued declines in secondary trading on Wednesday as market tone weakened in the high-yield space.

Altera Infrastructure LP’s 8½% senior notes due 2023 (Caa3/CCC/CCC-) were down 12 points on the day and almost 20 points lower from the same session a week ago.

“The bonds were at 75 earlier this month, then 65, and it printed at 53½ today,” a source said. “It’s traded a couple of times and has just gotten destroyed.”

TPC Group Inc.’s 10½% senior secured notes due 2024 (Caa2/CCC-/B-) fell over 1½ points on Wednesday with the issue now trading nearly 20 points lower from a week ago.

Diamond Sports Group LLC’s paper remained weak on Wednesday after losing over 6 points to 7 points in the prior two sessions.

The high-yield space was “a little soft,” a market source said.

The iShares iBoxx High Yield Corporate Bond ETF closed 9 cents lower at $86.70.

Measured market volatility was higher with the Chicago Board Options Exchange’s CBOE Volatility index up 4.83% by the close to 17.16.

Talen Energy Supply LLC’s bonds were unchanged to slightly higher on the day as oil slid over $2.

West Texas Intermediate crude oil benchmark futures for December deliveries settled $2.40 lower at $78.36 a barrel.

PBF Holding Co. LLC’s paper traded up ¼ point to ½ point.

In other activity, S&P Global Ratings said in a report on Tuesday that the trailing 12-month speculative-grade corporate default rate could rise to 2½% by September 2022 from 2.4% in September 2021.

S&P puts the default rate in its optimistic scenario at 1½% by September 2022 and the rate in its pessimistic scenario at 5½%.

Altera notes down

Altera Infrastructure’s 8½% senior notes due 2023 (Caa3/CCC/CCC-) sank 12 points on Wednesday to 53½ bid by the close, a source said.

The issue traded at 75¼ bid in the same session a week ago.

Altera’s senior notes opened the week nearly 10 points softer at 65½ bid.

The Westhill, U.K.-based energy infrastructure services partnership focuses on assets in the offshore oil regions of the North Sea, Brazil and the East Coast of Canada.

TPC Group declines

TPC Group’s 10½% senior secured notes due 2024 (Caa2/CCC-/B-) were down over 1½ points at 74 bid on Wednesday, a source said.

TPC’s notes have been “leaking a lot lately,” the source said.

The issue fell about 3½ points on Monday and softened about ¾ point on Tuesday.

TPC’s secured notes traded at the 91 bid area in the prior week.

The Houston-based chemical manufacturer announced its third-quarter earnings results on Friday.

Diamond Sports weak

Diamond Sports’ paper stayed “weak” on Wednesday, according to a market source.

The company’s 5 3/8% senior secured notes due 2026 (Caa1/CCC) were flat to about ¼ point lower at 50 1/8 bid over the afternoon.

The notes declined over 5 points on Monday and fell 1½ points on Tuesday.

Diamond Sports’ 6 5/8% senior notes due 2027 (Ca/CC) dipped ½ point to 25¼ bid.

The notes dropped about 6¼ points on Monday and fell about 1¼ points on Tuesday.

The paper gave back gains made in the prior week after the Chesapeake, Va.-based sports broadcast group’s parent, Sinclair Broadcast Group Inc., announced it had purchased $184.4 million of Diamond Sports’ existing accounts receivable securitization facility and increased the facility’s size.

Talen better on day

In other secondary volume, Talen Energy’s notes improved slightly but remained soft so far in the week, a source said.

The Woodlands, Tex., and Allentown, Pa.-based power company’s 10½% senior notes due 2026 (B3/CCC/B-) rose about ½ point to 67¼ bid.

The bonds are trading over 2 points lower from the prior week.

PBF notes improve

PBF Holding’s paper traded up ¼ point to ½ point on Wednesday, a source said.

The 7¼% senior notes due 2025 (Caa1/B/B-) were modestly better at the 79¾ bid area by late in the day.

The notes traded as high as 80½ bid during the session.

The Parsippany, N.J.-based petroleum refiner’s issue has gained over 20 points since August.

Distressed returns drop

Distressed index returns have been soft over the first two sessions of the week.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return was minus 0.79% on Tuesday, improved from minus 1.46% on Monday.

Month-to-date total returns widened to minus 0.88% from minus 0.09% at the week’s start.

Year-to-date total returns fell to 27.89%, compared to 28.91% on Monday.

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