Exide bonds fall after reorganization plan proposed; Puerto Rico G.O.s drop on downgrade

By Stephanie N. Rotondo

Phoenix, July 1 – The first trading day of July was a muted one for the distressed debt space, due in part to it being a short week and in part because of the World Cup match between the U.S. team and Belgium that started just as the market was closing.

When asked what was notable for the day, one trader quipped, “The score is tied 0-0.”

But as for the day’s dealings, Exide Technologies Inc. bonds were deemed “down a bunch,” though not overly active, following the release of a proposed plan of reorganization put together by a majority of senior secured noteholders.

The plan would deleverage the company by over $700 million.

Meanwhile, distressed investors were also keeping an eye on Puerto Rico’s municipal debt after Moody’s Investors Service downgraded both the general obligation bonds and the sales tax-backed debt.

Overall, the market ended the day mixed.

Caesars Entertainment Corp.’s 10% second-lien notes due 2018 were steady at 38½, a trader said, but both the 9% notes due 2020 and the 12¾% notes due 2018 were up fractionally at 83 1/8 and 44, respectively.

In the world of retail, Gymboree Corp.’s 9 1/8% notes due 2018 fell 1½ points to 66¾. However, RadioShack Corp.’s 6¾% notes due 2019 inched up a tad to 42.

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