Commodities mixed in week’s last full session; Longview Power pushes up loan deadline

By Stephanie N. Rotondo

Phoenix, April 2 – The distressed debt market ended Thursday still focusing on commodity names.

However, traders noted that liquidity was a little muted, given that the bond market will be closing early for the Good Friday holiday.

As for the day’s dealings, a trader noted that the iron ore arena “got beaten down a bit yesterday,” adding that the sector had “rallied back a bit.”

Come Thursday, the space was “holding about unchanged.”

One trader said FMG Resources was “fading,” seeing the 6% notes due 2017 losing 1½ points to end around 95.

However, he called the 8¼% notes due 2019 unchanged at 80.

The trader also saw sector peer Cliffs Natural Resources Inc.’s 5.95% notes due 2018 dropping 2½ points to 70.

At another desk, FMG’s 6 7/8% notes due 2022 were placed in the high-60s, while the 2017 paper was seen in a 95 to 96 context.

As for Cliffs’ debt, the market source said the 8¼% first-lien notes due 2020 “continued to trade down,” seeing the issue around 90½.

The 7¾% second-lien notes due 2020 meantime ended down about 3 points at 63 bid, 64 offered, the source said.

“That deal has just been a pig,” he said.

The first-lien deal priced March 25 at 93.243 to yield 10%. The company has issued the second-liens as part of a recently concluded tender offer for four series of notes.

A third market source deemed FMG’s 6% notes off 3½ points at 95½.

Elsewhere in the commodity arena, coal names finished the day in mixed fashion.

One trader said Peabody Energy Corp.’s 6¼% notes due 2021 fell half a point to 58.

Another trader said the 10% notes due 2022 – a $1 billion issue that came March 5 – were unchanged at 86.

The issue priced at 97.566.

Yet another source saw the 6½% notes due 2020 at 59¼ bid, up a quarter-point on the day.

In Alpha Natural Resources Inc. paper, a source called the 6¼% notes due 2021 down 1½ points at 26 bid.

Longview Power rushing loan

Longview Power LLC accelerated the commitment deadline on its $275 million senior secured credit facility (B2/BB-) to 2 p.m. ET on Monday from Wednesday, a market source said.

The facility consists of a $25 million five-year revolver and a $250 million six-year term loan B.

Talk on the term loan B is Libor plus 625 bps to 650 bps with a 1% Libor floor, an original issue discount of 98 and 101 soft call protection for one year.

Morgan Stanley Senior Funding Inc. and KKR Capital Markets are leading the deal that will be used as exit financing to provide for distributions under the company’s reorganization plan, to complete repairs to the Longview Power Facility and for working capital.

Longview Power is a Maidsville, W.Va.-based integrated power generation enterprise. The company filed for bankruptcy on Aug. 30, 2013. The Chapter 11 case number is 13-12211.

Sara Rosenberg contributed to this article

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