J.C. Penney debt quoted down as CIT halts supplier payments; Caesars continues bouncing around

By Stephanie N. Rotondo

Phoenix, July 31 - Distressed bonds were mostly weaker Wednesday, as the Federal Reserve said it was maintaining its current monetary policy.

J.C. Penney Co., Inc.'s debt "got hit late in the day," a trader said, following news that lender CIT Group Inc. had stopped paying suppliers of the struggling retailer.

The buzz is that the lenders got a sneak peek of the company's earnings and didn't like what they found.

Meanwhile, Caesars Entertainment Corp. bonds continued to "bounce around," according to a trader, just one day after the company reported a narrower quarterly loss, but on lower revenues.

J.C. Penney lower on credit issues

A trader said J.C. Penney's debt was being quoted down at least 5 points late in the day following news that lender CIT Group had stopped paying some of the retailer's suppliers.

However, he noted that there weren't many trades happening, which led him to speculate that the name might get busier in Thursday trading.

The trader quoted the 5.65% notes due 2020 at 75 bid, 77 offered and the 5¾% notes due 2018 at 80 bid, 82 offered.

Another market source said the 5.65% notes traded down a point at 811/2. Yet another trader called that issue off half a point at 81.

The last trader also saw the 7.95% notes due 2017 at 951/2, down just a touch.

The New York Post reported late Wednesday that CIT - the largest lender for the U.S. retail industry - had halted supplier payments, though the bank did not provide a reason. Speculation is that the lenders were spooked after getting a sneak peek at financials during a meeting with the retailer on Tuesday.

Among other retailers, RadioShack Corp.'s 6¾% notes due 2019 were pegged "around 70, about where they were," a trader said.

Caesars ends mixed

Caesars' bonds were "all over the place," a trader said Wednesday, just one day after the Las Vegas-based casino and hotel operator reported second-quarter results.

He said the 10% notes due 2018 were down, though "off the bottom," closing around 54. He said the issue had gotten as low as 53 during the day.

The trader also saw the11¼% notes due 2017 slipping to 1033/4.

However, the 5 5/8% notes due 2015 were up nearly 2 points at 861/4, while the 5¾% notes due 2017 rose 1¾ points to 561/2.

On Tuesday, Caesars posted a net loss of $212.2 million, compared to $241.7 million the year before.

The previous year's loss was due in part to a $101 million writedown on land owned in Macau.

Fewer gambling guests were the cause of the loss, the company said.

Sales were down 0.3% to $2.16 billion.

PDVSA rises, OGX slips

Among distressed emerging market names, Venezuela's Petroleos de Venezuela SA saw its bonds inching higher.

A trader said the 8½% notes due 2017 closed at 921/2, as the 9¾% notes due 2035 ended at 78 7/8.

Meanwhile, OGX Petroleo & Gas Participacoes SA's 8½% notes due 2018 fell a quarter-point to 21 3/8.

© 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.