ATP Oil & Gas bonds stay busy but weaken; Dex notes giving back gains; broad market ends mixed

By Stephanie N. Rotondo

Phoenix, Aug. 23 - Thursday was a flat day for distressed bonds and volume was "pretty light," according to a trader.

Another trader said there was "no question" that a lack of supply in the distressed space meant slow-goings.

"Everything is picked over," he said. Barring any new recruits to the ranks of distressed, or news to move what little supply there is, the market will likely limp along sideways.

The same lack of supply or any real volatility has helped ATP Oil & Gas Corp. remain active, the trader commented. On top of the fact that it's a big issue, the name has obviously been topical of late, given the company's recent bankruptcy filing.

Another topical name is Dex One Corp., which announced earlier this week that it was merging with its sector peer/rival, SuperMedia Inc. The news initially resulted in massive gains for Dex's debt, but a trader said the notes were starting to come back in.

ATP remains volatile

ATP Oil & Gas' 11 7/8% notes due 2015 fell "another point," a trader said, to end around 27.

Another trader said the paper was "down a little more," also around 27.

"ATP has been the main distressed name," the second trader remarked.

The name has always been one of the more commonly traded securities, but that trend was further fueled in recent weeks, first on talk of a bankruptcy filing and then on the actual filing.

The Houston-based offshore oil exploration company filed for Chapter 11 protections on Friday.

Earlier this week, the company was granted access to its $618 million debtor-in-possession loan.

Dex giving back gains

Dex One's 12%/14% PIK notes due 2017 slipped to 371/4, according to one trader.

But another trader said the bonds were "kind of in line with where it has been" at 37.

The Cary, N.C.-based phonebook publisher's debt jumped up 10 points on Tuesday on news the company was merging with Dallas-based SuperMedia. Under the terms of the deal, shareholders of both companies will receive new equity in a new company post-merger, with Dex's shareholders getting the majority of the new stock.

The deal is expected to close in the fourth quarter.

Some up, some down

Elsewhere in the distressed arena, a trader said Edison International Inc.'s 7¾% notes due 2013 fell nearly a point to 541/2.

Petroleos de Venezuela SA's bonds were also weaker, the trader said, deeming the name down half a point across the board.

The 5½% notes due 2037 closed around 60, as the 5 3/8% notes due 2027 ended at 62. The 8½% notes due 2017 fell to levels around 87.

Momentive Performance Chemicals Inc.'s 9% notes due 2021, however, were seen up "almost a point" at 73.

And, Clear Channel Communications Inc.'s 11% notes due 2016 inched up half a point to 63.

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