AMR drops further as US Airways merger in doubt; J.C. Penney paper weakens; broad market mixed

By Stephanie N. Rotondo

Phoenix, Aug. 14 - After a slight surge in activity levels on Tuesday, volumes were again muted in the distressed debt arena on Wednesday, according to a trader.

"Volume is lower and lower, it seems," he said.

As for the day's goings-on, AMR Corp. "continued to be the bond of the day," a trader said.

The trader saw the benchmark 6.25% convertible notes due 2014 falling even more during the midweek session, just one day after the Justice Department sued to block a merger between the bankrupt airline and US Airways.

"They were down another... well, a lot," he said, pegging the issue at 95 bid, 96 offered.

The paper went out in a 103-104 context on Tuesday.

J.C. Penney Co. Inc.'s debt also remained topical, following a public feud between activist investor Bill Ackman and the retailer's board of directors.

It was reported late Monday that Ackman had agreed to step down from the board. His exit came on the heels of his push to find a new chief executive officer for the struggling business.

A trader said the 7.65% notes due 2016 were off 3 points, closing with an 84 handle, while the 5.65% notes due 2020 lost about a point, ending around 70.

Another market source saw the 5.65% notes dropping 2 points to 70½ bid.

Meanwhile, a trader said Momentive Performance Materials Inc.'s 11½% notes due 2016 fell over 2 points to 743/4.

At another shop, a trader said Exide Technologies Inc.'s 8 5/8% notes due 2018 were "stronger" at 66½ bid, 67 offered.

Caesars Entertainment Corp. was trending higher, though there has been no fresh news since the company said it was selling its Macau property over the weekend.

A trader called the 10% notes due 2018 up a deuce at 581/2, while the 8½% notes due 2020 rose a point to 94 5/8.

Caesars will receive $438 million for its golf resort property. Proceeds will be used for capital expenditures or to reduce debt.

© 2015 Prospect News.
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