Distressed bonds gaining strength with broad market; OGX, Cengage firm; Rural/Metro takes dive

By Stephanie N. Rotondo

Phoenix, July 9 - Distressed debt was again firm on Tuesday, according to traders.

"There are buyers of everything," one trader said, though he lamented that there were "no sellers.

"Things are overpriced anyway, but everything remains strong."

Recently topical names like OGX Petroleo & Gas Participacoes SA and Cengage Learning Acquisitions Inc. continued to be busy. One trader saw OGX's 8½% notes due 2018 falling almost a point to close around 25, while another said the bonds were steady in a 25 to 26 context.

Cengage's 10½% notes due 2015 meantime were "moving higher," a trader said, seeing the paper trade "into the low-20s."

Elsewhere, Clear Channel Communications Inc.'s LBO debt was stronger. A trader called the 10¾% and 11% notes due 2016 putting on 1½ points, closing around 90.

Another trader said the 9% notes due 2021 earned a deuce, trading at 971/2.

Edison Mission Energy bonds were also firming, closing "up near 60," according to one trader.

That trader also saw Overseas Shipholding Group Inc.'s 8 1/8% notes due 2018 trading around 89, while Nortel Networks Corp.'s 10 1/8% notes due 2013 finished around 1121/4.

Rural/Metro skids

Rumor has it that Rural/Metro Corp. might have trouble making a July 15 coupon payment on its 10 1/8% notes due 2019.

A trader said the bonds have dropped 10 to 15 points in the last week, falling to around 70 from the low-80s.

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