Energy Future powers up as fears subside; Harrahs moves up; Rite Aid to post results Thursday

By Stephanie N. Rotondo

Portland, Ore., March 30 - Distressed debt was trending better during Wednesday's session, according to a trader.

"The world was a wonderful place," he said. "Pretty much everything was better."

Energy Future Holdings Corp. was leading the pack, as its bonds gained anywhere from 1 to 2 points on the day. A trader opined that the gains were caused by less fear in the marketplace.

Elsewhere, Caesars Entertainment Corp.'s debt was also heading higher, though on no news.

TXU firms as fear subsides

Energy Future Holdings, more commonly referred to by its former moniker TXU Corp., was seen moving up as "fears [associated with Japan's 8.9-magnitude earthquake earlier in the month] are being replaced by optimism," a trader said.

He pegged the 10¼% notes due 2015 at 583/4, a 2-point gain, with $20 million to $25 million trading. The 10 7/8% notes due 2017 improved 1½ points to end around 84, while the 6½% notes due 2024 traded up "a couple points" to 471/4.

"It's becoming topical," he said. "It's too cheap compared to everything else."

At another desk, the 6½% notes were pegged at 46½ bid, 47½ offered, up 1½ points. The 11¼% notes due 2017 moved up a point or 2 to 83¼ bid, 84¼ offered.

Credit default swaps to protect against a TXU default have been declining recently, signaling to the market that an alleged breach of covenants by Aurelius Capital Management LP is without merit.

Energy Future is a Dallas-based power producer.

Rite Aid results Thursday

Trading in Rite Aid Corp. was "quiet" during the midweek session, according to a trader.

However, he said that with the release of the company's same-store sales numbers on Thursday, he expected trading to be much busier in the next session.

OPTI, NewPage hold in

Elsewhere in the distressed debt realm, a trader said OPTI Canada Inc.'s subordinated issues - the 7 7/8% and 8¼% notes due 2014 - were unchanged at 52½ bid, 53 offered. The 9% "super senior" notes due 2012 were also steady at 101½ bid, 102 offered.

It was also "status quo" for NewPage Corp.'s 11 3/8% notes due 2014, a trader said. He called the notes "up marginally" around par 1/2, on "$10-odd million" traded.

Another trader said that Harry & David Holdings Inc.'s 9% notes due 2013 were trading in a 22-24¼ context, "a couple of million [bonds] each."

He said trading in the bankrupt Medford, Ore.-based specialty retailer was "situational, volume a little bit better today."

Paul Deckelman contributed to this article

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