Peabody Energy bonds continue to weaken; Concordia debt steady in wake of new deal

By Stephanie N. Rotondo

Seattle, Oct. 7 – The distressed debt was mixed as the week came to a close, though traders noted that liquidity was muted.

One trader remarked that Frontier Communications Corp. – a straight high-yield name – was taking up most of the day’s activity, as the Federal Communications Commission announced rate changes for business data services.

In a statement, Frontier said it continued to oppose the changes, even though they were less severe than previously expected.

The latest jobs report might have also weighed on trading volume.

The Labor Department said 156,000 jobs were added in September. That followed a 167,000 increase in August.

However, the figure was lower than the 172,000 add forecast by economists.

Additionally, the jobless rate ticked up to 5% from 4.9%.

As for the day’s dealings, Peabody Energy Corp.’s debt continued to slip on Friday, continuing the trend from Thursday.

The bonds had driven up at least 10 points earlier in the week, as the market reacted positively to improving coal prices.

A trader said the 10% notes due 2022 were off “a few points,” trading at 52˝. The unsecured notes – such as the 6% notes due 2018 – were “down a couple points” at 33˝.

“I didn’t see any particular news” to cause the weakness, the trader said. “Maybe it was profit taking.”

Another market source saw the 6˝% notes due 2020 at 34 bid, off 2˝ points.

Concordia International Corp. was meantime treading water in the wake of the company’s new issue that priced Thursday.

The 9˝% notes due 2022 were “still” in the mid-70s, a trader said, while the 7% notes due 2023 were steady in the “higher-60s.”

As for the $350 million of 9% first-lien senior secured notes due 2022 that came Thursday, they were trading “around 102.”

That was down from a 103 to 104 ZIP code previously.

The older issues had declined on Thursday, as investors moved into the new issue.

Meanwhile, Intelsat SA “continues to move up,” a trader said.

He said the 5˝% notes due 2023 were “pretty active,” trading “around 71.” The 7Ľ% notes due 2019 ended in an 83˝ to 84 context, he added.

“Those have been creeping up every day,” he commented.

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