Fed minutes result in mixed results for distressed debt; Caesars slips on default notice

By Stephanie N. Rotondo

Phoenix, Oct. 8 – The distressed debt market was mixed on Wednesday, as investors digested the latest minutes from the Federal Reserve.

Those minutes – which showed the central bank had no immediate plans to raise interest rates – also helped the equity markets regain Tuesday’s losses.

Of the day’s dealings, Caesars Entertainment Corp.’s 10% second-lien notes due 2018 were under pressure, though this time on news the company had been served with a default notice.

The debt has been drifting lower for weeks, but with no news to act as a catalyst.

Meanwhile, Endeavour International Inc. was circling the drain, as the company held last-minute negotiations with noteholders to come up with a refinancing plan, lest it should be forced into Chapter 11 protections. The talks come after the company missed a coupon payment in early September.

Elsewhere in the mining space, the results were mixed for the day, echoing the trend of the overall market.

MolyCorp Inc.’s 10% notes due 2020 were seen inching higher, ending around 72½, a trader said.

But coal producer Alpha Natural Resources Inc. saw its 6¼% notes due 2021 dive 2½ points to 52½ bid.

In Quicksilver Resources Inc., the company’s bonds were softer on the day.

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