Distressed debt market comes in as market inches upward; Exide bonds active; coal mixed

By Stephanie N. Rotondo

Phoenix, March 18 - Though the high-yield market was ticking higher on Tuesday, distressed bonds were closing with a generally weaker tone, traders reported.

Caesars Entertainment Corp.'s paper remained soft, even as the company said it had received preliminary approvals to begin building a gaming site in South Korea.

A trader saw the 10% notes due 2018 falling almost half a point to 42 on "20-some trades," while the 9% notes due 2020 dipped a like amount to 883/4.

RadioShack Corp.'s 6¾% notes due 2019 meantime declined almost 3 points on the day, despite a lack of fresh news to act as a catalyst.

A trader pegged the issue around 523/4.

In the emerging market space, Chilean grocery store operator SMU SA saw its 7¾% notes due 2020 trading around 70.

A trader said the issue had traded around 75 at the beginning of last week.

Exide trades actively

A trader said Exide Technologies Inc.'s 8 5/8% notes due 2018 "have been pretty active," seeing the notes trade in a 75 to 76 context.

However, he said he had not seen any news to drive the name.

Another trader said the bonds were "down sharply," losing 2½ points from Friday levels to trade around 741/2.

Exide is an Alpharetta, Ga.-based manufacturer and recycler of batteries.

Coal mostly weaker

Coal names continued to move around during Tuesday's session.

A trader said Walter Energy Inc.'s 8½% notes due 2021 rose 1½ points to end around 70.

However, he also saw Alpha Natural Resources Inc.'s 6¼% notes due 2021 fall to 771/4. Still, he noted that he had seen paper trade as high as 80 toward the end of the day.

Another market source deemed the issue off nearly a point at 77¾ bid.

And, Mongolian Mining Corp.'s $600 million issue of 8 7/8% notes due 2017 slipped a point to 68.

A trader said the debt has been trading more actively over the last few days, though there has been no fresh news since earlier in the month when the company said it expected coking coal prices to remain weak.

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