Distressed debt activity muted as supply eyed; Revlon bonds flat to better post-earnings

By Stephanie N. Rotondo

Seattle, Aug. 4 – A distressed debt trader said investors continued to focus on recently priced high-yield issues on Friday, leaving little room for action in the distressed space.

“All of the stuff that was going on today was new issues,” he said.

There was, however, some activity centered on distressed retailers during the end-of-the-week session.

Revlon Inc.’s paper was unchanged to better, according to one trader, though the cosmetics company swung to a loss for the second quarter.

The trader called the 6¼% notes due 2024 unchanged at 76, though he added that there were “lots of trades” in the issue.

He also saw the 5¾% notes due 2021 firming 2½ points to 86½.

For the quarter, Revlon posted a loss of $36.5 million, or 70 cents per share.

On an adjusted basis, the company lost 46 cents per share.

Revenue came to $645.7 million.

Among other retailers, Guitar Center Inc.’s 6½% notes due 2019 were pegged at 89¾, up ¼ point.

Bon-Ton Stores Inc.’s 8% notes due 2021 followed the upward trend, rising 1½ points to 39½.

And, Petsmart Inc.’s 7 1/8% notes due 2023 were also a little better, closing up ½ point to 88¼.

Away from retail, a trader said California Resources Corp. was surprisingly quiet, given that the company had released results.

He said the notes traded at 60 5/8, down 1¼ points.

Another market source placed the issue at 61½, a loss of 1¼ points.

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