Greek drama weighs on distressed debt; CalRes falls on short-seller report; Peabody soft

By Stephanie N. Rotondo

Phoenix, June 26 – The distressed debt market weakened going into the weekend, as a debt deal in Greece remained elusive.

It was reported that Greek Prime Minister Alexis Tsipras called an urgent cabinet meeting for Friday evening to discuss a bailout deal.

California Resources Corp.’s bonds were “active and topical,” a trader said, after short-seller BlueMountain Capital Management LLC deemed the company’s equity as worthless and said the debt would need to be restructured.

The bonds came in “a few points” on the report.

Meanwhile, coal producer Peabody Energy Corp. was weaker yet again on Friday. The name was likely not helped by word of a rating downgrade.

Also in the energy space, Energy Future Holdings Corp.’s Texas Competitive Electric Holdings Co. LLC-linked notes were unchanged to softer following news the bankrupt company had scrapped a plan to auction off its Oncor Electric unit.

Among other bankrupt companies, a trader said there was “not a lot of trading” in MolyCorp Inc. paper, though he noted that the debt was “quoted lower.”

He said the 10% notes due 2020 were being quoted in the high-20s, adding that “the converts are getting pummeled.”

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