SuperValu bonds still stay active, but steady; ATP Oil & Gas debt weaker on EPA bond concerns

By Stephanie N. Rotondo

Phoenix, Jan. 14. - The distressed debt market was on the flat side during Monday trading, according to market sources.

Even SuperValu Inc., which has been a topical name, was essentially sideways on the day.

That was not the case, however, for ATP Oil & Gas Corp., whose bonds got "destroyed," in the words of one trader. The trader speculated that the weakness was continued fallout from talk that the bankrupt company might have to put up another bond in order to satisfy the Environmental Protection Agency.

SuperValu holds its ground

A trader said that SuperValu "wasn't all that active relative to last week," though he added that the 8% notes due 2016 were "the most active" of the various issues within the structure.

He quoted the issue at 99¼ bid, 991/2, unchanged.

Another trader also called the paper unchanged at 991/4.

The Eden Prairie, Minn.-based grocery store operator got busy in the previous week on news Cerberus Capital Management LP was leading a group to buy five of the company's chains. Additionally, Cerberus is leading a tender offer for up to 30% of SuperValu's stock at $4 per share.

ATP declines again

ATP Oil & Gas' 11 7/8% notes due 2015 "got destroyed," a trader said on Monday, seeing the bonds fall to just over 61/2.

He called that "down a buck or so."

Another trader pegged the issue at 6½ bid, 7½ offered.

The first trader said he believed the declines were based on news out last week about the bankrupt Houston-based oil and gas exploration company having to put up another bond to satisfy EPA requirements.

The bond was said to be for up to $340 million.

Distressed names pressured

Among other distressed issues, Edison Mission Energy's bonds were slipping to level around 47, according to a trader.

The trader noted that the CDS settles on Wednesday.

Meanwhile, MF Global Futures Ltd.'s benchmark 6¼% notes due 2016 were "down a tiny bit" to 64 bid, 64½ offered.

And, Geokinetics Holdings USA Inc.'s 9¾% notes due 2014 dipped to "47-ish," a trader said, on "tiny scraps trading."

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