Distressed space firm, but muted amid Leap, AT&T merger news; OGX bonds hang in as stock rises

By Stephanie N. Rotondo

Phoenix, July 15 - The distressed debt market "continues to feel pretty strong," a trader said Monday.

However, another trader said overall volume was "abysmal," given that it was a Monday and that many investors were focused on Leap Wireless in the wake of news of a merger with AT&T.

OGX Petroleo e Gas Participacoes SA continued to be a topical name, as the struggling oil producer's stock got a boost during the trading session.

The gains were attributed to hopes that recent talks with banks will allow the Brazilian company owned by Eike Batista to stay afloat.

The stock (SAO: OGXP3) was up 8 centavos to 51 centavos. That was a gain of over 15% on the day.

Meanwhile, a trader said the 8½% notes due 2018 were down slightly at 161/2. However, another trader said the debt was "really no different," trading in a 16 to 17 context.

The company missed a coupon payment on July 1 and said last week that it has no plans to restructure its dollar-denominated debt.

Among other distressed names, Exide Technologies Inc.'s 8 5/8% notes due 2018 fell a point to 591/2, according to a trader.

Another trader said Clear Channel Communications Inc.'s 11% notes due 2016 were up "half a point or so," at 94.

And, Nortel Networks Corp.'s 10¾% notes due 2016 "continued to be strong," the trader said, seeing the issue trading up to 1131/4.

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