Distressed bonds softer on muted activity; commodity names mixed; Goodrich swapping debt

By Stephanie N. Rotondo

Phoenix, Sept. 25 – The distressed debt market closed the week with a weaker tone, though market sources noted that investors were focusing their attention elsewhere.

Specifically, a trader said most of the attention was on new deals from Olin Corp. and Cablevision Systems Corp./Altice. Those deals were putting pressure on their respective sectors – chemicals and cable – the trader said. Olin in particular had the chemical sector running for safety as the deal was downsized and price talk on the two-tranche issue was massively boosted.

“There are still a lot of these bigger deals like Frontier [Communications Corp.] trading,” the trader added. “There wasn’t a ton” of trading in distressed issues, however. “Even iHeart [Media Inc.] didn’t trade that much.”

Still, Alpha Natural Resources Inc.’s unsecured notes – such as the 6¼% notes due 2021 – ended softer, closing “around 4,” according to a trader.

Elsewhere among commodity names, oil and gas bonds were mixed on the day, even as domestic crude prices improved 1.54%.

SandRidge Energy Inc.’s 7½% notes due 2021, for instance, closed a point higher at 24 bid, a market source reported. But Linn Energy LLC’s 7¾% notes due 2021 fell 3 points, also closing at 24 bid.

Oil prices ended the session in higher territory after Baker Hughes reported that the active U.S. oil rig count fell by 4 last week, marking the fourth straight week of downward moves.

Goodrich Petroleum Corp. announced a privately negotiated debt swap on Friday. On the news, the company’s preferred stock was seen ending mixed.

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