AmerenEnergy's recent rally comes to an end; Cengage Learning bonds soften, as advisors hired

By Stephanie N. Rotondo

Phoenix, March 22 - The high-yield bond market "never really got going," a trader said Friday.

"It was quiet," he said, speculating that it was due to "basketball tournament hangover coupled with a slower week because of Spring Break."

Another trader opined that the market was simply "tired."

And, a third trader said the overall market was "barely moved" in terms of price.

AmerenEnergy Generating Co. saw a recent rally "take a breather," a trader reported. The company's bonds had gained as much as 8 to 9 points in the last couple of sessions, but gave back a little come Friday.

Elsewhere, Cengage Learning Acquisitions Inc.'s bonds dropped 2 to 3 points after the company announced a draw on its revolving credit facility and also said that it had hired restructuring advisors.

Ameren's rally busted

AmerenEnergy Generating's two-day rally - which resulted in gains of as much as 8 to 9 points - came to a halt on Friday.

"They were flying over the last couple of days," a trader said, seeing the 7% notes due 2018 falling a point to 81 come Friday trading.

The 7.95% notes due 2032 were also off a point, closing at 74.

Another trader said the bonds "gave a little back," pegging the 7.95% notes at 73 bid, 74 offered.

A third trader said the debt "hit the wall," dropping half a point to a point.

He quoted the 7% notes at 80 bid, 81 offered and the 7.95% notes at 73 bid, 74 offered.

On March 14, the power producer said it had inked an agreement with Dynegy to sell its merchant generating business. Though Ameren will not receive any cash in the deal, Dynegy is assuming about $850 million of Ameren's debt.

Ameren is also expected to realize $180 million in tax benefits.

Cengage debt slips

Cengage Learning's 11½% notes due 2020 were under pressure in the final trading day of the week, as the company announced a evolver draw and the hiring of restructuring advisors.

A trader placed the notes at 74 bid, 75 offered, versus previous levels of 76 bid, 77 offered.

Another trader called the issue "down a couple points" at 73 bid, 74 offered, compared to levels around 76 previously.

And, the company's extended term loan dropped as low as 71 bid, 72½ offered. However, by late day, the debt had rebounded to 72¼ bid, 73¼ offered, according to a trader. On Thursday, the loan was quoted at 72 5/8 bid, 73 1/8 offered.

The company borrowed $430 million under its revolver, which basically puts the loan at fully drawn, in order to ensure that it has sufficient liquidity to fund working capital needs, a news release said.

And, the company retained Alvarez & Marsal as restructuring advisor, Lazard as financial advisor and Kirkland & Ellis LLP as legal advisor.

Cengage is a Stamford, Conn.-based provider of teaching, learning and research services for the academic, professional and library markets.

Caesars wins, ATP loses

Elsewhere in the distressed space, a trader said Caesars Entertainment Corp.'s 10% notes due 2018 were the day's "top trader," gaining "almost a point" to 67 7/8.

Another trader said ATP Oil & Gas Corp.'s 11 7/8% notes due 2015 were down half a point at 61/2.

Sara Rosenberg contributed to this article

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