Distressed bond activity remains weak; Harvey does little to move oil names; grocers slip

By Stephanie N. Rotondo

Seattle, Aug. 28 – Trading picked up in the distressed debt market on Monday, though it continued to be less than stellar.

“It was a little bit more busy than the last few days,” one trader said.

“There was so little volume today at all,” said another trader.

The second trader also remarked that he was “not even sure that there was any theme” for the day, even in the wake of Hurricane Harvey.

Harvey hit landfall in Texas on Friday night as a Category 4 storm. Since then, many of Texas’ most populous cities have been inundated with torrential rains.

While domestic crude oil prices did decline in Harvey’s wake, there was little movement among distressed energy names.

California Resources Corp.’s 8% second-lien notes due 2022 were among the day’s most active securities, but a trader said the paper was “virtually unchanged” at 53½.

Another trader also said the bonds were “sideways” for the session.

As for EP Energy LLC, its 8% notes due 2025 were a touch lower at 67½, according to a trader.

For its part, West Texas Intermediate crude declined $1.20, or 2.51%, to $46.67 a barrel.

Away from oil and gas-linked bonds, grocers continued to feel the pressure as Amazon followed through with its promise to reduce prices at recently-acquired Whole Foods.

Fresh Market Inc. continued to get beaten down, its 9¾% notes due 2023 falling 1½ points to 76½, a trader said.

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