Diamond Sports mixed; Ligado steadies; Talen, Peabody bonds gain; Washington Prime off

By Cristal Cody

Tupelo, Miss., June 23 – Diamond Sports Group LLC’s bonds went out mixed on Wednesday following parent company Sinclair Broadcast Group, Inc.’s Monday disclosure of attempts to secure new funding for the Chesapeake, Va.-based sports broadcast group.

The company’s 5 3/8% senior secured notes due 2026 (B2/CCC+) slipped ¾ point to 66¾ bid on $29.5 million of bonds traded on Wednesday, a source said.

The notes fell nearly 2½ points on more than $34.5 million of secondary volume on Tuesday.

The issue traded at 71½ bid in the same session a week ago and were bid at 81¼ at the start of the year.

Diamond Sports’ 6 5/8% senior notes due 2027 (Caa2/CCC-) improved to 50¼ bid in light supply after trading down 3½ points to 49½ bid in the prior session.

Sinclair announced in an 8-K filing with the Securities and Exchange Commission on Monday that it has entered into agreements with certain lenders and noteholders for potential interest in funding new debt and exchanging and/or repurchasing existing debt but has not been able to reach a definitive agreement.

According to SEC filings, Sinclair made two proposals to lenders and noteholders of Diamond Sports, including a March 22 proposal for $600 million of new money first priority super priority debt and up to $6.34 billion of second priority super priority debt.

In a proposal dated April 29, Sinclair proposed issuing $500 million of new money financing and a roll-up of notes into $100 million of first-lien bonds at prices between par and a 35% discount and yields from 9½% to 6.615% across three tranches.

Ligado mostly unchanged

Ligado Networks’ paper traded mostly unchanged on Wednesday following the company’s outlook change to negative.

The company’s 15½% senior secured first-lien notes due 2023 (Caa1) were up modestly near the 99¼ bid area in light trading over the day, a source said.

The notes have softened about ½ point month to date.

The issue traded at 98 bid at the year’s start.

Ligado’s 17½% notes due 2024 (Caa1) were flat at 76½ bid after trading down ¼ point on Tuesday.

The 2024 notes have dropped about 2¼ points since the end of May. The bonds traded at 75 bid at the start of 2021.

Moody’s Investors Service on Tuesday changed the company’s outlook to negative from stable on concerns of sufficient liquidity to meet cash requirements for a period of at least 18 months.

The Reston, Va.-based satellite communications company announced on Monday that it received approvals from the Third Generation Partnership Project to enable its L-band spectrum to be deployed in 5G networks.

Ligado said it is developing a 5G mobile private network solution to bring next-generation networks to critical infrastructures including in energy, manufacturing, health care and transportation.

Talen bonds gain

In the energy space, Talen Energy Supply LLC’s bonds climbed over 1 point in secondary trading during the day, a source reported.

Talen’s 10½% notes due 2026 (B3/CCC+/B) improved 1¼ points to 81 bid after gaining 2¼ points on Tuesday and 1 point on Monday. The issue saw $2 million of trading volume on Wednesday.

The bonds still remain softer than the 91 bid seen at the end of May and the 89 bid area at the start of the year since Moody’s Investors Service dropped The Woodlands, Tex., and Allentown, Pa.-based power company’s outlook to negative from stable earlier in June.

Peabody bonds better

In other distressed energy issues, Peabody Energy Corp.’s 6 3/8% notes due 2025 (Caa1/CCC) gained ¾ point to 73½ bid in strong trading on Wednesday, a source said.

The notes are ½ point softer week to date but remain better than the 57¾ bid range seen at the end of May and the 54 bid area at the start of the year.

S&P Global Ratings upgraded the St. Louis-based coal producer’s ratings to CCC from SD earlier in June.

The agency said Peabody’s outlook is negative, and it views the company’s recent trade of lower-priority common shares for its 6% senior notes due 2022 as a selective default.

Meanwhile, oil prices perked up during the session after softening on Tuesday.

North Sea Brent crude oil futures for August deliveries improved 38 cents to settle at $75.19 a barrel.

West Texas intermediate crude oil benchmark futures for August deliveries rose 23 cents to settle at $73.08 a barrel.

Overall market tone was mixed.

The iShares iBoxx High Yield Corporate Bond ETF closed down 9 cents at $87.57.

Washington Prime weakens

In other distressed secondary action, Washington Prime Group, LP’s 6.45% notes due 2024 (C/D/CC) traded going out Wednesday at the 69 bid area, down from the 71½ bid area in the prior session, a source said.

The notes fell about 1½ points on Tuesday and 2¼ points on Monday.

In the prior week, Washington Prime Group Inc. filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas on June 13.

The Columbus, Ohio-based shopping center real estate investment trust had been in a forbearance agreement since March 16 over a missed $23.2 million interest payment on the 6.45% notes that was due Feb. 15.

Washington Prime has secured a $100 million non-amortizing multiple draw super-priority senior secured debtor-in-possession term loan from the consenting creditors to support daily operations.

The company plans to restructure its corporate-level debt, either through a full equitization of its unsecured notes or an alternative value-maximizing transaction that would repay in full in cash all of its corporate debt.

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