Distressed debt market ‘basically shut down’ for the week; Peabody, Avaya inch higher; oil debt dips

By Stephanie N. Rotondo

Seattle, Sept. 1 – Weakness crept into the distressed debt market on Thursday as the new month began.

However, one trader opined that overall volume was limited and that it was therefore difficult to say if the space was actually weaker.

“It feels like [the market] has basically shut down until Tuesday,” he said.

The markets will be closed Monday in observance of Labor Day.

While the overall tone of the day was softer, there were a few names that managed to buck the trend.

Peabody Energy Corp., for instance, continued to inch upward. A trader said the 10% notes due 2022 were “up another half a point” at 34½.

“They continue to trade well,” he said.

Another market source deemed the 6½% notes due 2020 a point better at 22½ bid.

Avaya Inc. was another name that was gaining ground, albeit modestly so. A trader saw the 9% notes due 2019 tick up half a point to around 77.

The trader noted that there was some news out on the company regarding its intention to stay current on its debt obligations.

Back in June, the Santa Clara, Calif.-based telecommunications technology company began talking with bondholders on ways to reduce its $6 billion debtload.

The oil and gas arena was meantime weaker for the day, due in large part to yet another decline in oil prices.

Domestic crude dropped 2.65% in Thursday trading, ending at $44.10 a barrel. The commodity also declined on Wednesday, as the U.S. Energy Information Administration said crude and refined stockpiles continued to build up to record levels.

One trader said California Resources Corp.’s 8% notes due 2022 were down a point at 66 7/8. Another source pegged Chesapeake Energy Corp.’s 6 5/8% notes due 2020 at 89 bid, a loss of half a point for the day.

Intelsat SA paper was meantime mixed in Thursday trading, just one day after the company said it was swapping the leftover $142 million of the 6 5/8% notes due 2022.

That paper is linked to Intelsat Jackson Holdings SA.

The 7¼% notes due 2020 were a shade higher at 78, according to a trader. The 7¼% notes due 2019 were also a mite stronger, trading at 80½.

The 6¾% notes due 2018, however, dipped a quarter-point to 65¾.

© 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.