21st Century ‘up smartly’ on recapitalization news; Arch sees wider loss, debt gains steam

By Stephanie N. Rotondo

Phoenix, July 29 – Fresh news was driving several distressed debt bonds around on Tuesday.

21st Century Oncology Inc. paper was “up smartly,” a trader said, after the company said it had inked a deal with noteholders on a recapitalization plan.

The bonds were up as much as 5 points on the day.

A group of ad hoc noteholders agreed to support a plan that would require the company to seek additional liquidity – either through an equity infusion or through the sale of subordinated debt – by Oct. 1. Alternatively, the company can also look to recapitalize its debt – which it might have to do if it cannot find additional capital by Aug. 31, according to the agreement.

Meanwhile, Arch Coal Inc.’s debt was unchanged to better, despite the coal producer reporting a wider quarterly loss.

Low coal prices remained a key driver of the wider loss, the company said. Ongoing competition from natural gas and transportation backlogs were also playing a role.

Still, the company ended the quarter with $1.25 billion of liquidity, including $1 billion in cash and equivalents.

Not much moved was RadioShack Corp. Market sources deemed the retailer’s bonds unchanged on the day, even as a new report from Moody’s Investors Service claimed that the company would run out of cash before the end of 2015.

NII Holdings Inc.’s debt was weaker Tuesday, though there was no fresh news to act as a catalyst.

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