AMD quoted lower as Moody's cuts ratings; Caesars' losses mount; MF Global gets a boost

By Stephanie N. Rotondo

Phoenix, Jan. 31 - It was "another down day for most of this [distressed] stuff," a trader reported Thursday.

Advanced Micro Devices Inc.'s debt was not trading much, but was quoted lower following a rating downgrade from Moody's Investors Service. Caesars Entertainment Corp. was also on the downside, a trend the name has seen over the course of the week, despite no fresh news.

But MF Global Futures Ltd.'s bonds were getting boosted leading up to news that came out near the close regarding an intercompany settlement.

AMD quoted softer

Moody's cut Advanced Micro Devices' ratings on Thursday due to expectations of lower operating performance and liquidity profile over the course of 2013.

The company's bonds, however, did not move much in terms of volume, but a trader saw the 7¾% notes due 2020 quoted lower at 83½ bid, 84 offered.

"They were in the upper-80s a couple days ago," he said.

Moody's lowered AMD's corporate family rating to B2 from B1, with a negative outlook.

The Sunnyvale, Calif.-based chipmaker has struggled of late as PC demand has declined and competition increased. The company is in process of attempting to turn itself around, but the effort could result in a cash drain, Moody's said.

Caesars drifts in again

Las Vegas-based casino operator Caesars has seen its bonds dipping over the course of the week, though there has been no fresh news to act as catalyst.

One market source called the 10% notes due 2018 down nearly 2 points at 68 bid.

At another desk, a trader called the issue down almost half a point at 68 bid, 69 offered.

MF Global gains strength

The approval of an intercompany settlement that will allow customers to recoup more than previously thought gave MF Global's debt a boost on Thursday.

A trader pegged the benchmark 6¼%/7¼% notes due 2016 at 71 bid, 72 offered.

The settlement between the defunct company's U.S. and U.K. operations will allow another $500 million to $600 million of funds to be distributed to customers whose funds had gone missing. The total recovery expected for U.S. customers is now as much as 93%. Most customers have received about 80% thus far.

U.K. customers will meantime receive between 75% and 82% recovery. Those customers have received only about 5% of their expected recovery at this point.

Ameren rises, ATP slips

Elsewhere in the distressed arena, a trader said Ameren Energy Generating Co.'s 7.95% notes due 2032 "rebounded" about 3 points, closing at 62 7/8.

Another trader saw ATP Oil & Gas Corp.'s 11 7/8% notes due 2015 falling further into the single digits, closing at 6 bid, 6¼ offered.

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