Distressed market quiet before holiday, Caesars bonds up, oil names struggle despite crude surge

By Paul Deckelman

New York, Jan. 16 – The distressed debt market finished out the week on a relatively quiet note, traders said Friday, in line with a generally calmer high-yield market in the run-up to Monday’s Martin Luther King Day holiday, which will see the debt markets in the United States closed.

For a second consecutive session, the various bonds of Caesars Entertainment Corp. moved higher – although not on any kind of overwhelming volume – as investors positioned themselves in the wake of Thursday’s move by the troubled Las Vegas-based gaming giant to voluntarily put its principal operating entity into Chapter 11 in order to reorganize its more than $18 billion of debt. That has set off a confrontation for control of the reorganization process between the company and some of its bondholders, who filed their own, involuntary Chapter 11 petition against the company.

There was little action seen in RadioShack Corp. bonds, as bankruptcy rumors swirled around the troubled Fort Worth, Texas-based consumer electronics retail chain operator.

Crude oil futures moved sharply higher on Friday after the International Energy Agency predicted that the recent slide in world oil prices would eventually help to correct the over-supply problem that’s been undermining prices – by leading to output cuts, particularly from oil producers outside of the Organization of the Petroleum Exporting Countries. However, that surge did not prevent oil and gas names like Linn Energy, LLC from heading lower.

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