Distressed bonds continue to retreat; Endeavour up on restructuring plan; Cliffs rebounds

By Stephanie N. Rotondo

Phoenix, Oct. 14 – The distressed debt market was weaker as it came back from the three-day weekend.

“Everything continues to kind of struggle,” one trader said.

“Things are just generally weaker,” said another trader.

For its part, the KDP High Yield Index dipped below its recent 52-week low. Tuesday’s reading was 71.3, with a 5.82% yield. That compared to Friday’s level of 71.65, with a 5.72% yield.

The recent 52-week low – hit just last month – was 71.53.

Despite the ongoing softness in the fixed-income space, there were a couple distressed names that went against the grain.

Endeavour International Corp. announced late Friday that it had reached a restructuring agreement with a majority of bondholders. The company filed for bankruptcy to facilitate that plan.

On the news, the company’s bonds surged “about a dozen points,” according to one trader.

Cliffs Natural Resources Inc. also “rebounded some,” a trader said. The gains came as iron ore prices were rising and investors were mulling news that Glencore had approached the company about n asset sale.

Advanced Micro Devices Inc.’s bonds “continued to be softer,” a trader said Tuesday.

On Wednesday, AMD said that Rory Read, president and chief executive officer, is leaving the post he has held for the last three years as the company attempts to take market share from Intel.

Lisa Su, chief operating officer, will take over.

Fannie Mae and Freddie Mac preferreds rose in early trading, but gave back those gains by the end of business.

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