FOMC meeting weighs on distressed trading; Exide gives up gains; Momentive higher; PDVSA soft

By Stephanie N. Rotondo

Phoenix, June 18 - Distressed bonds were firm again on Tuesday, but volume remained subdued ahead of the Federal Reserve's FOMC meeting announcement.

The announcement is expected to come around 2 p.m. ET on Wednesday.

"Everything was up," a trader said. "The stock market leads everything."

But despite the strength in the market, the trader noted that there was a lack of sellers around.

Another trader said volume was "very light," adding that in the high-yield space overall, there were "only 10 names with double-digit trades."

The recently topical - and bankrupt - Exide Technologies Inc. continued to move about, though in trading that was "not nearly as active" as it has been over the last week, a trader commented. The trader said the 8 5/8% notes due 2018 "gave up some ground" gained in the previous session, falling over 3 points to 66.

Another trader pegged the issue around 65.

The bonds had put on about 4 to 5 points on Monday on news a Los Angeles County Superior Court judge had given the company approval to reopen its Vernon, Calif.-based recycling center, which had been shuttered by state environmental regulators in April.

Meanwhile, Momentive Performance Materials Inc. paper stuck with the day's trend, closing up as much as 1½ points on the day.

A trader saw the 11½% notes due 2016 moving up to 791/2, while the 8 7/8% notes due 2020 closed around 1053/4.

The emerging market space continued to be active, though as far as distressed names go, the arena was mixed in line with domestic issues.

Petroleos de Venezuela SA's bonds remained under pressure, according to a trader. The 9¾% notes due 2035 - the day's top trader in the high-yield space - were off half a point at 781/2, as the 5 3/8% notes due 2027 declined almost that much to 601/4.

The 9% notes due 2021 closed around 83.

Desarrolladora Homex SAB de CV's 7½% notes due 2015 meantime closed up almost a point to 421/2.

And, OGX Petroleo & Gas Participacoes SA's 8 3/8% notes due 2022 dropped 2½ points to 361/2, a trader said, though he added that it was "only on a single trade."

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