Commodity-linked paper up post-Fed; AMD firms on potential Intel deal; Intelsat bonds slip

Seattle, March 17 – The distressed debt market was generally firmer Thursday, as the broader markets posted gains as well.

The gains were attributed to the Federal Reserve’s decision on Wednesday to maintain interest rates in a 0.25% to 0.5% range, as well as a revised forecast of fewer increases over the course of the year. The news resulted in a weaker dollar in Thursday trading, which helped commodities – including oil – surge in price.

The rally in commodity prices boosted distressed energy and mining names.

Away from commodity-linked issues, Advanced Micro Devices Inc. paper was gaining ground as rumors swirled about a potential licensing agreement with Intel Corp.

While the market overall was pushing higher, Intelsat SA bonds were drifting down. The weakness came as Bloomberg reported the company was in talks with bondholders regarding a debt swap and cash injection.

The news outlet also said Intelsat’s previously reported plans to amend its credit facility had fallen through.

After the Fed held rates steady on Wednesday – and also indicated that only two increases would likely occur this year, down from previous forecasts of four– commodity prices got a boost as the dollar declined.

Domestic crude oil added nearly 4% for the day, trading north of $41 a barrel. Copper rose almost 2.5%.

In the oil and gas arena, Latin American-focused Pacific Exploration & Production Corp. saw its 5 1/8% notes due 2025 jumping 4˝ points to 20, according to a trader.

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