RadioShack notes slide though DIP approved; oil, coal names busy; Fortescue paper pressured

By Paul Deckelman

New York, March 6 – Distressed bonds were seen generally easier on Friday, in line with a downturn in the larger junk bond market – which in turn took its cues from the bloodletting on Wall Street in both the stock and Treasury markets that occurred after a stronger-than-expected February non-farm payrolls figure sparked investor fears that the positive economic indicator would push central bank policymakers to raise interest rates sooner rather than later.

Among specific names, RadioShack Corp.’s already-battered bonds fell several points further, into single-digit territory, despite seemingly good news – the bankruptcy court overseeing the faltering consumer electronics retailer’s reorganization gave final approval to the company’s $285.33 million debtor-in-possession facility that will provide operating cash while RadioShack dismantles its far-flung empire of more than 4,000 stores in the United States.

There was activity in the energy sector, including names like Energy XXI Gulf Coast, Inc., whose existing bonds lost ground in the wake of the company’s big new junk bond deal, and Halcon Resources Corp.

In the coal space, Cliffs Natural Resources Inc.’s bonds were actively traded, and traders also saw markets in sector peers such as Alpha Natural Resources, Inc. and Arch Coal, Inc.

Australian resources company Fortescue Metals Group’s $7.39 billion bank loan debt, which launched at a Friday bank meeting, was putting pressure on the company’s existing term loan paper, as well as its junk bonds.

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