Trading remains light; Momentive jumps on reset rate ruling; BB&B improves slightly

By Abigail W. Adams

Portland, Me., April 22 – The distressed debt space saw another session of light trading volume with few names active on Monday.

However, Momentive Performance Materials Inc.’s 3.88% senior notes due 2022 were in focus with the notes jumping following a court ruling in favor of creditors.

Monday also marked a strong day for energy names with crude oil futures catapulting past $65 a barrel.

California Resources Corp.’s bellwether 8% senior notes due 2022 followed suit with the notes gaining ¾ point.

While volume was light, Bed Bath & Beyond Inc.’s 5.165% senior notes due 2044 were slightly improved following a shakeup on the board of directors.

Momentive jumps

Momentive’s 3.88% senior notes due 2022 were in focus in the distressed debt space following a favorable court ruling for creditors.

The 3.88% notes jumped 2 points to 110 5/8 in active trading, a market source said.

The notes were making gains after creditors won a favorable ruling on the reset rates from the initial restructuring agreement, a market source said.

The U.S. appeals court in New York ruled on Friday in favor of creditors who challenged the interest rates established in bankruptcy court for holders of the company’s secured notes, Reuters reported.

The reset rates were below market rates, creditors claimed, and the appeals court agreed.

Momentive filed for bankruptcy in 2014.

While the 3.88% notes do not trade as if they are distressed debt, that is largely due to payments in arrears from litigation from a few years ago, a market source said.

California Resources gains

California Resources’ 8% senior notes due 2022 were making gains on a strong day for crude oil futures on Monday.

The 8% notes were seen at 83 bid, 84 offered early in the session, according to a market source.

They rose about ¾ point to close the day at 83½.

Crude oil futures jumped on Monday after the United States announced it would end the waiver it had granted to certain countries for Iranian oil imports.

The barrel price of WTI crude oil for May delivery settled at $65.70, an increase of $1.70, or 2.66%, on Monday.

Bed Bath & Beyond improves

Bed Bath & Beyond’s 5.165% senior notes due 2044 were slightly improved on Monday following news of a shakeup on the board of directors.

The 5.165% notes were up 1/8 point to 75 3/8, a market source said. However, volume was relatively light.

The struggling retailer announced on Monday five new members to its board of directors with its co-founders stepping down.

The investor group that had been pressuring for the change – Legion Partners Holdings, Macellum Advisors GP and Ancora Advisors – subsequently released a statement that the board shakeup did not go far enough to address the issues with the company.

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