Distressed debt mixed after Wednesday tumble; Fannie, Freddie preferreds remain under pressure

By Stephanie N. Rotondo

Phoenix, May 30 - It was a mixed day for distressed debt on Thursday, as the equity markets managed to rebound from Wednesday lows.

Topical names like Clear Channel Communications Inc. managed to regain a little bit of ground, with the 11% notes due 2016 rising half a point to 951/2, according to one trader.

Even Mexican homebuilder Desalladorra Homex SAB de CV's 7½% notes due 2015 were able to recoup some losses, putting on nearly 4 points to close around 37.

But Exide Technologies Inc.'s 8 5/8% notes due 2018 remained weak. A trader said the issue dropped another point to 641/2, while another trader placed the debt around "65-ish."

Still, some names were just holding steady, like Ahern Rentals Inc., whose 9¼% notes due 2013 were pegged around 1111/2.

A trader said there was news out on MF Global Futures Ltd. regarding more money coming out of its European unit. But the bonds weren't much changed and the 6¼% notes due 2016 were seen trading with a 68 handle.

Fannie, Freddie softer

Fannie Mae and Freddie Mac preferreds remained weak on Thursday, following a big drop on Wednesday.

Freddie's 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) were down 21 cents, or 3.15%, at $6.25, while Fannie's 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) declined by 26 cents, or 3.97%, to $6.29.

On Wednesday, the mortgage giants saw their preferred securities tank, though market sources said the declines were based on pure speculation and profit-taking.

Late Wednesday, it was reported that the Senate is looking to introduce a bill in the near future that would create one single entity to replace the government-backed firms. It is still not clear what that bill would contain or how it would wind down the enterprises.

Broad market bits

Also in the land of distressed, a trader saw Edison Mission Energy's bonds - which tend to trade on top of one another - at 57½ bid, 58 offered.

The trader also saw Overseas Shipholding Group Inc.'s 8 1/8% notes due 2018 at 81.

And, Ameren Energy Generating Co.'s 7.95% notes due 2032 closed at 80, while the 6.3% notes due 2020 ended at 81.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.