Energy names better in line with higher oil prices; Peabody up on credit facility change

By Paul Deckelman

New York, Feb. 6 – The distressed debt market was relatively sedate on Friday, traders said, with no names standing out in particular.

They said that much of the attention of investors was focused on the high-yield primary market, which has seen active new issuance all week, plus robust trading in the secondary market for many of the larger new deals. Such was also the case on Friday, with the pricing and subsequent move upward in trading of deep-discount retailer Dollar Tree, Inc.’s massive $3.25 billion two-part deal.

Back among the more challenged junk credits, traders said that the volatile energy sector – which has been yo-yoing up and down along with crude oil prices – was better for a second consecutive session, in line with an improvement in oil levels.

Among the beneficiaries were sector bellwether California Resources Corp., Linn Energy LLC and Energy XXI Gulf Coast, Inc.

Coal operator Peabody Energy Corp.’s bonds were better in fairly active dealings as the company and its lenders reached agreement on amending its credit facility.

On the downside, retailer Claire’s Stores Inc.’s bonds remained under pressure.

Fellow retailer RadioShack Corp.’s bankruptcy filing on Thursday was long-expected and was treated pretty much like a non-event. Sprint Corp. – which will establish a presence in the between 1,500 and 2,400 RadioShack stores that are to be sold via the bankruptcy process to General Wireless Inc., an affiliate of Standard General LP – was better on the session.

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