Cloud Peak jumps on exchange news; Intelsat retreats; Fannie, Freddie preferreds fizzle

By Stephanie N. Rotondo

Seattle, Sept. 12 – The first trading day of the week began with a lower tone, traders reported Monday.

However, things started to turn up towards the end of the day.

“There was a big swoon in the morning, then a lot of stuff came roaring back with stocks,” a trader said.

One name that got a sizeable boost for the day was Cloud Peak Energy Inc. The Gillette, Wyo.-based coal producer said Monday that it was exchanging up to $400 million of its existing notes for new 12% second-lien notes due 2021. In response, the bonds “were up a bunch,” a trader said.

Another name that was up more than average for the day was Viking Cruises. A trader said the 6¼% notes due 2025 improved 5 points to 84½.

“Those haven’t traded in eons,” the trader said, and there was no fresh news to cause such a move.

As for the day’s downers, Intelsat SA debt remained modestly weaker. One trader said it was a continuation of Friday’s trend, when the company said the in-service date for its Intelsat 33e satellite would be delayed.

Fannie Mae and Freddie Mac preferreds were under pressure on Monday, following news out on Friday of another court case being thrown out.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) dropped 42 cents, or 10.99%, to $3.40. Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) declined 43 cents, or 11.98%, to $3.16.

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