Caesars bonds seen active, Radiation Therapy off lows; Puerto Rico worries fluster funds

By Paul Deckelman

New York, July11 – The distressed-debt market saw a mostly quiet Friday, traders said, pretty much in line with a quiet session – outside of the new-deal arena – in the larger high-yield bond market.

Here and there, though, there was activity, although there was no overriding theme.

Traders saw relatively brisk dealings in the various bonds of Caesars Entertainment Corp., although there was no firm direction – some of the Caesars paper was up, some down, and some just went sideways.

There was little in the way of concrete developments regarding the Las Vegas-based casino giant, other than news reports indicating that the company had taken a key step in what is expected to be its eventual plan of restructuring its more than $20 billion of debt with the hiring of a law firm.

Radiation Therapy Services Inc.’s bonds, which were battered earlier in the week on investor worries about Medicare and Medicaid reimbursement levels for the healthcare operator, appeared to have stabilized and were ending the week up from their lows, traders said.

In the municipals market, investors were pondering the latest ominous news – that funds investing in muni debt had seen more than $790 million of outflows in the latest week, their biggest cash hemorrhage since January. Much of the redemptions were attributed to investors nervous about their exposure to debt of Puerto Rico, especially since the island commonwealth’s legislature recently passed a measure allowing its public entities to restructure their debt, leading to ratings downgrades by both Moody’s and Fitch.

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