TXU bonds active amid court fight; iPayment rebound continues; OSG tweaks exit funding

By Paul Deckelman

New York, June 30 – The distressed-debt market was seen mostly quiet on the last day of June, which also marked the end of the year’s second quarter and its first half. Traders said that with the books on those periods already closed, investors mostly hugged the sidelines.

Here and there, though, some distressed names were fairly busy.

The company formerly known as TXU Corp. was the center of more courtroom drama on Monday, as Energy Future Holdings Corp. outlined the details of its planned $1.9 billion loan and various groups of creditors asked a bankruptcy judge to hold off on approving the plan, citing their claims that it treats them unfairly.

Bonds issued by Energy Future’s Texas Competitive Electric Holdings Co. LLC gyrated in active dealings.

iPayment, Inc.’s bonds were seen up by several points in fairly active trading, continuing a recent trend that has seen levels firm up from the lows seen in recent weeks after disappointing earnings and ratings-agency fears about weak liquidity.

In the bank-debt market, Overseas Shipholding Group Inc. was heard by sources to have cut the pricing on two tranches of term loan debt that are part of $1.35 billion of financing that the New York-based petroleum tanker operator has lined up to help it emerge from Chapter 11. It also upsized one of those term loan tranches by $25 million, while downsizing a planned revolving credit line by the same amount.

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