AMR plans tender offer, bonds rise; MF Global shakes off Corzine lawsuit; broad market rallies

By Stephanie N. Rotondo

Phoenix, June 27 - It was another strong day for distressed bonds, as concerns faded about the Federal Reserve's plans for its quantitative easing.

"All that low-coupon stuff caught a nice rally," a trader said. "There weren't many losers."

AMR Corp. announced on Wednesday that it was tendering for three series of notes. Come Thursday, those issues were seen trading up.

However, there was not much follow-through in MF Global Holdings Ltd.'s debt after it was reported that the Commodity Futures Trading Commission had filed a civil lawsuit against the company's former chief executive, Jon Corzine, for his part in the downfall of the firm.

AMR up on tender

AMR is tendering for its 8 5/8% class A pass-through certificates, series 2011-2, its 10 3/8% class A pass-through certificates, series 2009-1 and its 13% 2009-2 secured notes due 2016, the airline said in a press release on Wednesday.

Come Thursday, a trader said all the issues had moved up to 1061/2.

The tender offer expires Aug. 2. Those who tender by July 10 will receive an early tender payment of $65 per $1,000 of notes.

The bankrupt airline is based in Dallas.

MF Global unfazed by lawsuit

The CFTC has filed civil charges against MF Global's former CEO and former New Jersey governor Jon Corzine for his role in the downfall of the futures brokerage.

However, a trader said he "didn't see all that much activity" in the name, but pondered that there could be some action on Friday once investors had the chance to digest the news.

He pegged the 6¼% variable-rate notes due 2016 at 48.

Another market source called the issue up 2 points at 48 bid, 48¼ offered.

New York-based MF Global went bust in 2011 and was soon charged with misusing about $1.2 billion of customer funds. In the CFTC lawsuit, the watchdog alleges that Corzine is responsible for the company's demise and its unlawful actions, as he "either did not act in good faith or knowingly induced these violations."

The company's former assistant treasurer, Edith O'Brien, was also named in the civil suit.

Broad market posts gains

Elsewhere in the distressed space, a trader said Momentive Performance Materials Inc.'s 8 7/8% notes due 2020 were up over 2 points to "almost" 105.

He also called Clear Channel Communications Inc.'s LBO debt stronger, seeing the 11% notes due 2016 rising a deuce to 89 and the 10¾% notes due 2016 up 1¾ points at 88.

Another trader saw Exide Technologies Inc.'s 8 5/8% notes due 2018 firming to 62, while Overseas Shipholding Group Inc.'s 8 1/8% notes due 2018 moved up to a high of around 833/4.

The energy sector was also running up after falling in the recent selloff.

A trader pegged Arch Coal Inc.'s 7¼% notes due 2021 at 813/4, up nearly a point.

A second trader said Edison Mission Energy's debt was trading around 59.

He also saw Ameren Energy Generating Co.'s 7% notes due 2018 inching up to 831/2.

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