Endo notes slide; Diamond Sports steady; Transocean paper rallies; CURO, Coinbase trade

By Cristal Cody

Tupelo, Miss., March 1 – The distressed bond market saw heavy secondary trading on Tuesday in issues from Endo International plc, Diamond Sports Group LLC and Transocean Inc.

Endo’s bonds were the most active distressed issues traded over the session with the paper declining about 1½ points to over 4 points after the company reported a fourth-quarter loss on Monday.

The company’s stock slid 22.51% to finish at $2.41.

Unsecured paper from Diamond Sports Group also was strongly traded over the day but mostly unchanged.

Transocean’s 8% debentures due 2027 (Ca/CCC+) rallied 1¾ points after oil broke over $100 a barrel as the Russia-Ukraine conflict continued.

West Texas Intermediate crude oil benchmark futures for April deliveries, which rallied $4.13 on Monday, soared $7.69 to settle Tuesday at $103.41 a barrel.

Measured market volatility was over 10% higher, and stock indices dove over 1½% by the close.

The iShares iBoxx High Yield Corporate Bond ETF fell 23 cents to $83.13.

In other secondary activity, CURO Group Holdings Corp.’s 7½% senior secured notes due August 2028 (B3/B-) that priced in July were about ½ point better in thin trading after dropping nearly 1½ points on Monday.

The bonds have remained below issuance and softened last week following the company’s report of a fourth-quarter loss.

Crypto trader Coinbase Global, Inc.’s senior guaranteed notes (Ba1/BB+) that priced in 2021 are considered “stressed, but not distressed” as the issues remain softer than issuance, a source said.

Another source noted that “nobody thinks it’s going to default.”

The company’s notes have climbed about 1¼ points to over 3 points since Russia’s invasion of Ukraine and following news reports it will not freeze all Russian accounts.

Endo bonds drop

Endo Finance LLC’s 6% senior notes due 2028 (Caa3/CCC-) dropped over 4 points on Tuesday to near 62½ bid on $17 million of secondary supply, a source said.

The company’s 9½% senior secured notes due 2027 (Caa2/CCC+) were 1½ points lower at 96 bid with $21 million of volume seen.

Endo International on Monday reported a fourth-quarter loss of $556.67 million, compared to a profit of $141.25 million a year ago.

Revenue was up 4% at $789.43 million in the quarter.

Endo released first-quarter 2022 earnings guidance of 35 cents to 45 cents a share.

The Dublin-based pharmaceuticals maker announced in February that it expected a Tennessee state court to issue a default judgment against its subsidiaries regarding opioid-related claims in 13 counties with a damages trial anticipated in April 2023.

In January, Endo reported it reached a $65 million opioid-related settlement with Florida.

In 2021, the company announced opioid-related settlements that included a $35 million settlement in Tennessee, a $7.5 million settlement with the Louisiana Attorney General's office and a $50 million agreement to settle three opioid-related cases in New York.

Diamond Sports mostly flat

Diamond Sports’ 6 5/8% senior notes due 2027 (Ca/CC) were strongly traded on Tuesday with $12 million of paper changing hands better than the 23¾ bid area, a source said.

The issue was flat from Monday.

Diamond Sports’ 5 3/8% senior secured notes due 2026 (Caa1/CCC) improved over ½ point in thin trading to 42 bid over the day.

Diamond Sports’ parent Sinclair Broadcast Group Inc. announced in February the start of solicitation of consents for an exchange offer for the company’s 5 3/8% notes and plans to conditionally redeem its 12¾% senior secured notes due 2026.

The Chesapeake, Va.-based sports broadcast group announced the $600 million new money financing transaction and debt exchange of its term loans and notes in January.

Transocean higher

Transocean’s 8% debentures due 2027 (Ca/CCC+) climbed 1¾ points to 76 bid on Tuesday, a source said.

The Vernier, Switzerland-based offshore driller’s issue was among the active distressed bonds in the secondary market during the session with $14 million of notes traded.

Transocean’s other paper also was up about 1½ points in light secondary supply.

The 7¼% senior notes due 2025 (Ca/CCC) rose 1½ points to 79½ bid on $5 million of volume.

CURO edges up

CURO Group’s 7½% senior secured notes due August 2028 (B3/B-) improved about ½ point to near the 88¼ bid area in thin trading after dropping nearly 1½ points on Monday, a source said.

The bonds were trading at 93½ bid a month ago and over par at the start of the year.

CURO sold $750 million of the notes on July 16, 2021 at par.

The Wichita, Kan.-based consumer credit provider in February reported a fourth-quarter loss of $28.88 million, down from a $4.47 million profit a year ago.

Coinbase mixed

Coinbase’s 3 3/8% notes due 2028 improved about ¼ point to 91½ bid on Tuesday after starting the week mostly unchanged, a source said.

The notes traded about 1¼ points higher in the prior week.

Coinbase’s 3 5/8% notes due 2031 were about ¼ point lower at 88¼ bid after adding nearly 1 point on Monday.

The issue has climbed over 3 points since Thursday.

Coinbase sold $1 billion of the notes due 2028 at par and $1 billion of the 2031 notes at par on Sept. 14, 2021.

The Wilmington, Del.-based cryptocurrency exchange platform reported weak fourth-quarter earnings on Thursday.

Distressed returns positive

The S&P U.S. High Yield Corporate Distressed Bond index was positive at the start of the week.

The one-day total return on Monday was 0.07%, down from 1.5% on Friday.

Month-to-date total returns improved to minus 1.85%, compared to minus 1.92% ahead of the weekend.

Year-to-date index returns were stronger on Monday at minus 3.35% versus minus 3.42% on Friday.

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