Distressed market muted due to holiday; Navistar downgraded, debt softly traded; Caesars firms

By Stephanie N. Rotondo

Phoenix, Sept. 17 - Rosh Hashanah, the Jewish New Year, began Monday, meaning there was a "lighter crowd" during the day's trading session, a trader said.

The trader also noted that the muted high-yield arena might have also been taking a breather after the run-up seen late last week.

For the day, he called the distressed debt market sideways.

"It's pretty much unchanged," said another trader.

Navistar International Inc.'s debt was "probably lower," a trader said, though there was a lack of significant volume in the name. The trader was surprised, given that Fitch Ratings downgraded the struggling vehicle manufacturer.

Mixed on the day was Caesars Entertainment Corp., though there was no fresh news to act a catalyst.

Navistar downgraded

Navistar International's debt was "probably lower," but not all that active, a trader said, despite a downgrade from Fitch.

"There was not one trade on the downgrade," the trader remarked. "That's kind of weird."

He said the 8¼% notes due 2021 likely fell to 96½ bid, 97½ offered, down from 97½ bid, 98 offered previously.

Another trader said the debt was wrapped around the 97 mark.

Fitch, citing heightened liquidity risk and negative manufacturing free cash flow, cut its rating on the Lisle, Ill.-based vehicle manufacturer to CCC from B-.

The outlook is negative.

Caesars mostly higher

A trader said Caesars Entertainment's 10% notes due 2018 were about a point weaker on the day, trading around 701/2.

Other issues within the structure, however, were up about a point or more across the board.

The 11¼% notes due 2017 earned over a point to close at 110. The 10¾% notes due 2016 finished around 821/2, up 1½ points, and the 12¾% notes due 2018 ended around 791/4.

There was no fresh news out on the Las Vegas-based casino operator.

Broad market mixed

In the rest of the high-yield space, a trader saw Arch Coal Inc.'s 7¼% notes due 2021 a point weaker at 91.

Another trader said Eastman Kodak Co.'s debt was lower but quiet, the 9¾% second-line notes due 2018 at 63½ bid, 64½ offered and the 7¼% notes due 2013 wrapped around 12.

On the upside were Exide Technologies Inc.'s 8 5/8% notes due 2018, which a trader deemed "up a couple points" around 89.

He also saw Momentive Performance Materials Inc.'s 11½% notes due 2016 rising to 64.

© 2015 Prospect News.
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