Distressed debt gets boost from improving equities; PDVSA, Homex firm, OGX slides; Exide gains

By Stephanie N. Rotondo

Phoenix, June 13 - Positive jobs data helped the equity markets stem recent losses and the distressed debt market went along for the ride.

Most of the action in the distressed space, however, was in emerging market names, like Petroleos de Venezuela SA. The Venezuelan state-owned oil company's debt had been pressured with the recent selloff, but managed to put a few points back on during Thursday trading.

A trader saw the 8½% notes due 2017 up 3 points at 931/2, while the 5 3/8% notes due 2027 rose 1½ points to 62.

Mexican homebuilder Desarrolladora Homex SAB de CV was also firmer. Earlier in the week, the company announced that it had missed a coupon payment on its 9½% notes due 2019.

Those bonds moved up just over a point on Thursday, ending at 381/2.

But while most of the market was heading higher, Brazil's OGX Petroleo & Gas Participacoes' bonds were not. One trader said the name had the day's "top two losers," seeing both the 8½% notes due 2018 and the 8 3/8% notes due 2022 falling 6¾ points to 42¼ and 403/4, respectively.

Brazilian stocks have suffered over the last few days and in particular, companies owned by billionaire Eike Batista have been under pressure. Batista had announced earlier in the week that he intended to sell off some of his OGX shares in an effort to raise cash, sparking alarm that all of his companies might have capital shortfalls.

Back on the domestic side, Exide Technologies Inc. continued to see some action following the company's bankruptcy filing on Monday.

A trader said the 8 5/8% notes due 2018 initially opened with a low odd-lot trade around 55, which would have been weaker day over day. However, by the end of business, he saw the issue closing up a point at 601/2.

The filing marks the second time in a decade the Milton, Ga.-based battery maker and recycler has sought Chapter 11 protections.

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