Diamond Sports mostly lower; Telesat bonds decline; Nine Energy, PBF, Transocean higher

By Cristal Cody

Tupelo, Miss., Feb. 16 – Diamond Sports Group LLC’s notes traded about ½ point better to 2½ points weaker with the secured paper declining to the high 30s on Wednesday.

The notes were down about ½ point to 3/8 point on Tuesday after the company announced the start of the solicitation of consents for a debt exchange offer.

Telesat Corp.’s bonds have been active in the secondary market and trending lower this year over financing and execution concerns, sources reported.

Telesat Canada LLC’s unsecured notes were down 1 point on Wednesday and trading in the 50s, while its secured paper went out ¾ point lower and trading in the 70s.

The Ottawa-based satellite communications company announced in November that subsidiaries Telesat Canada and Loral Space & Communications Inc. completed a merger with the company now publicly traded on the Nasdaq and Toronto Stock Exchange under the ticker “TSAT.”

Shares were down 1.38% on Wednesday at $22.93.

A report on Wednesday from Covenant Review that evaluated the company’s capacity to transfer assets to unrestricted subsidiaries noted that Telesat Canada “may not technically” be a wholly owned subsidiary of Telesat Corp. under the indentures following the company’s listing.

Meanwhile, stocks were mixed following the release of the minutes from the Federal Reserve’s last policy meeting.

The iShares iBoxx High Yield Corporate Bond ETF climbed 46 cents to $83.12.

Distressed bonds in the oil and gas space were higher in light trading as oil improved after shedding over $3 on Tuesday.

West Texas Intermediate crude oil benchmark futures for March deliveries settled $1.59 higher at $93.66 a barrel.

Nine Energy Service, Inc.’s 8¾% notes due 2023 (Caa3/D) added 2 points over the session as the deadline nears for the company to submit a business plan or face delisting from the New York Stock Exchange.

PBF Energy Inc.’s 7¼% senior notes due 2025 (Caa1/B/B-) picked up over 1½ points after gaining 1 3/8 points on Tuesday.

Transocean Inc.’s 7½% senior notes due 2031 (Ca/CCC) also improved about 1¾ points on Wednesday.

In other distressed market news, S&P Global Ratings reported on Wednesday that fewer U.S. companies were at risk of downgrade at the start of 2022 than in any year since 2015.

U.S. corporates opened 2022 with the negative bias at 13%, the lowest level to start a year since 2015, S&P said.

Diamond Sports mixed

Diamond Sports’ 5 3/8% senior secured notes due 2026 (Caa1/CCC) traded Wednesday at 39½ bid, down 2½ points in steady trading action totaling over $10.5 million, a source reported.

The secured notes have declined about 4 points since Friday.

Diamond Sports’ 6 5/8% senior notes due 2027 (Ca/CC) rose about ½ point in thin trading to 24½ bid, about ½ point higher on the week.

Diamond Sports’ parent, Sinclair Broadcast Group Inc., announced on Tuesday the start of solicitation of consents for its exchange offer for all $3.05 billion of the 5 3/8% senior secured notes due 2026 and plans to conditionally redeem its 12¾% senior secured notes due 2026.

The Chesapeake, Va.-based sports broadcast group announced on Jan. 13 the $600 million new money financing transaction and debt exchange of its term loans and the 5 3/8% notes and 12¾% notes.

On Wednesday, Moody’s Investors Service gave a B2 rating to Diamond Sports’ proposed $635 million senior secured term loan and said it does not expect to upgrade the company’s corporate ratings following the transaction’s close.

Telesat bonds soften

Telesat Canada’s 6½% senior notes due 2027 (Caa1/B) fell 1 point to 56½ bid on Wednesday with the notes trading 2½ points softer this week, a source said.

The notes ended the prior week down about 3½ points and trading over 20 points lower since the end of 2021.

Telesat’s 4 7/8% senior secured notes due 2027 (B1/BB-) were ¾ point softer at 75¼ bid.

The notes have dropped 3¼ points since Friday after ending the prior week off about 1 point.

Telesat’s secured bonds were quoted in late January trading at 80 3/8 bid.

Nine Energy better

Nine Energy's 8¾% notes due 2023 (Caa3/D) jumped 2 points to hit 44½ bid on light trading volume totaling $1.5 million on Wednesday, according to a market source.

The notes are up about 1¼ points since mid-January.

Nine Energy is scheduled to post fourth-quarter and 2021 earnings results on March 8.

The Houston-based oilfield services company reported in January that it faces a court verdict and possible delisting from the NYSE.

Nine Energy announced on Jan. 24 that it plans to appeal after a Texas jury found it had infringed on a patent held by NCS Multistage Holdings, Inc. and awarded NCS damages in the amount of less than $500,000.

Nine Energy also reported on Jan. 7 that it received notice from the NYSE that the company is not in compliance with continued listing standards.

Nine Energy said it has 45 days from receipt of the Jan. 5 notice to submit a business plan to the NYSE demonstrating how it intends to regain compliance with the exchange’s standards within 18 months.

PBF, Transocean up

PBF’s 7¼% senior notes due 2025 (Caa1/B/B-) improved over 1½ points to near the 86½ bid area in light trading of under $4 million during the session, a source said.

The Parsippany, N.J.-based petroleum refiner’s notes were up about 1 3/8 points on Tuesday.

Transocean’s 7½% senior notes due 2031 (Ca/CCC) also were about 1¾ points stronger on the day.

The Vernier, Switzerland-based offshore driller’s issue was quoted at 64¾ bid in thin trading of less than $1 million.

Distressed returns gain

Distressed returns improved on Tuesday.

The S&P U.S. High Yield Corporate Distressed Bond index’s one-day total return rose to 0.39% from minus 0.43% on Monday.

Month-to-date total return declines narrowed to minus 0.67% from minus 1.06% on Monday.

Year-to-date returns improved to minus 2.19% versus minus 2.57% at the start of the week.

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