Momentive lenders denied vote change; Gymboree, RadioShack bonds soften ahead of earnings

By Stephanie N. Rotondo

Phoenix, Sept. 9 – Distressed bonds were lightening up during Tuesday trading, with some names pressured by fresh news – or even just the expectation of news.

Momentive Performance Materials Inc. was in the news again on Tuesday, as the judge overseeing the company’s bankruptcy case denied some bondholders the chance to change their vote.

On the news, traders said the company’s bonds were drifting downward.

The Waterford, N.Y.-based specialty chemical and polymer manufacturer filed for bankruptcy in April.

Also on the decline were retailers Gymboree Corp. and RadioShack Corp. Gymboree is scheduled to release its quarterly results on Wednesday and RadioShack’s are expected on Thursday.

RadioShack was also making headlines during the day’s session, as an analyst at Wedbush Securities deemed the company’s stock as worthless and predicted an imminent bankruptcy.

“Brick-and-mortar electronics retailers will see persistent structural decline as internet sales continue to take share,” the analyst wrote. “RadioShack has less financial flexibility to invest in price competitiveness, and its primary business is as a consumer-electronics convenience store. We believe the internet is more convenient.”

A trader said DynCorp International Inc.’s 10 3/8% notes due 2017 have lost 10 points from the end of August, seeing the paper finish Tuesday’s session around 84.

August was a tough month for the U.S. defense contractor.

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