Distressed debt sees slow recovery; iHeart follows downward trend; Energy XXI pressured

By Stephanie N. Rotondo

Phoenix, Aug. 12 – There was “some more volatility in the market” on Wednesday, a distressed debt trader said.

“There was a pretty good rebound in stocks, but a lot of the things I saw didn’t recover,” the trader added.

The equity markets were rebounding a bit as oil prices experienced a rally. However, the day started with a weak tone on continued concerns about China after it devalued its currency on Tuesday.

But in distressed bonds, signs of weakness remained. iHeartMedia Inc. paper, for instance, was down a few points “just because the market has been getting” battered, according to one trader.

He said the 14% notes due 2021 were “pretty active,” trading in a 60 to 60½ context. He called that down “3 to 4 points over the past couple of days.”

At another desk, that issue was deemed a point lower at 60½ on “almost 20 trades.”

As for the San Antonio-based multimedia company’s other issues, the second trader called the 10% notes due 2018 down 2½ points at 75 5/8, while the 11¼% notes due 2021 dropped a like amount to 90½.

Elsewhere, Energy XXI Ltd. bonds were getting beat up despite the modest gains in oil prices.

“I think there was a specific issue there,” a trader said. Two market sources reported that they saw headlines that indicated the Houston-based oil and gas producer was struggling to get a debt deal done.

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