Fed's QE3 launch buoys marketplace; Edison up as company prepares to submit restart plan

By Stephanie N. Rotondo

Phoenix, Sept. 13 - News that the Federal Reserve had launched a third round of quantitative easing and that it intended to keep interest rates low through 2013 gave the broad markets a boost Thursday.

That general strength then trickled down into the distressed debt space.

"The market rallied," a trader said. "More people are chasing bonds higher."

Still, investors were staying focused on high-yield bonds rather than distressed.

Edison International Inc.'s paper rose with the markets. The bonds might have also been helped out by news the company was looking to submit a restart plan on its San Onofre nuclear reactor to regulators by the first week of October.

Meanwhile, financial names were mostly firm on the day.

Edison debt ratchets higher

Edison International's debt gained about a point across the board Thursday, due in part to an overall strong marketplace and in part to fresh news on the Rosemead, Calif.-based power producer.

One trader pegged the 7% notes due 2017 up nearly a point at around 52.

Another trader said the debt was generically up a point, trading in a 51 to 52 context.

The power producer intends to file a restart plan for its Unit 2 reactor with the Nuclear Regulatory Commission by the first week of October. The San Onofre nuclear plant has been shuttered since January, when regulators found frayed steam generator tubes.

Edison is not yet looking to restart its Unit 3 reactor, which has been in the process of being emptied of fuel.

The plan could take regulators months to analyze. Since closing down, the company has spent $165 million in inspection, repair and replacement power costs as of June 30.

Financials firm

The positive market tone was helping some financial credits gain ground Thursday.

A trader said Ambac Financial Group Inc.'s bonds remained on an upward course, seeing the debt trading at around 40.

MF Global Holdings Ltd.'s 7¼% notes due 2016 were also firm at 471/2.

Springleaf Financial Corp.'s 6.9% notes due 2017, however, were a touch weaker at 861/2, according to a trader.

QE3 boosts market

Elsewhere in the distressed realm, Petroleos de Venezuela SA's 5 3/8% notes due 2027 were just slightly better at 62 3/8, a trader said.

The 9¾% notes due 2035 were unchanged at around 82.

Also in the oil space, a trader saw ATP Oil & Gas Corp.'s 11 7/8% notes due 2015 at 24½ bid, 24¾ offered.

The trader also saw NewPage Corp.'s 11 3/8% first-lien notes due 2014 rising to 64¾ bid, 65 offered and AMR Corp.'s benchmark 6¼% convertible notes due 2014 at 68 bid, 69 offered.

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