Distressed market selloff continues; PDVSA paper weighed down; Exide sees recent gains erased

By Stephanie N. Rotondo

Phoenix, June 5 - It was another down day for the distressed bond market on Wednesday.

"There's not too many on the upside," one trader said. "Everything is being repriced down."

Petroleos de Venezuela SA was the day's top trading name. The Venezuelan oil company's debt was down as much as 4 points on the day. Earlier in the week, it was announced that the company - which is state-owned and has been used to fund most of the nation's social programs - had signed a new loan agreement with a Chinese bank.

Meanwhile, Exide Technologies Inc. paper gave back some of the gains incurred on Tuesday. There was no fresh news out to cause the decline.

PDVSA pressured

PDVSA paper remained under pressure during midweek trading, losing as much as 4 points.

A trader saw the 8½% notes due 2017 fall almost half a point to 92, as the 9% notes due 2021 dropped 2¾ points to 851/4. The 9¾% notes due 2035 were off the most, slipping 4 points to 82.

On Monday, the state-owned oil producer announced it had secured a $4.02 billion loan agreement with China's Development Bank Corp. Proceeds from the new loan will be used to advance production at the Sinovensa heavy oil joint venture in the country's Orinoco belt.

The company intends to increase production to 6 million barrels per day by the end of 2019. At the end of 2012, 2.91 million barrels per day were being produced, as production stalled due to a variety of issues, including decaying infrastructure to get the oil out.

Exide gives back gains

Exide Technologies' 8 5/8% notes due 2018 were one of Tuesday's bright spots, but all the gains incurred in that session were erased come Wednesday.

A trader called the debt down 2½ points to 593/4.

The Tuesday jump was attributed to the news that North American shipments of new automotive batteries rose by 18% year over year in April, reflecting higher sales of new cars and trucks. The data from Battery Council International, an industry trade group, indicated that sales were at their highest levels in more than a year.

There was no new news out on Wednesday to push the paper down again.

Exide is a Milton, Ga.-based battery maker and recycler.

Caesars debt loses ground

Caesars Entertainment Corp.'s debt was taking a hit on Wednesday, though on no fresh news.

A trader called the 8½% notes due 2020 off a deuce at 92. Another market source deemed the 10% notes due 2018 also off 2 points, at 59½ bid.

Caesars is a Las Vegas-based casino operator.

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