Avon looking to sell equity; Quiksilver bonds jump on filing news; Basic Energy declines

By Stephanie N. Rotondo

Phoenix, Sept. 10 – Distressed bonds continued to be firm on Thursday, but it was more of a mixed bag for topical names.

Avon Products Inc. was mixed as it was reported the struggling cosmetics company was in talks with private-equity firms in regards to a stake sale.

At one desk, a trader said the 7.7% notes due 2043 were “unchanged, maybe up a tick” at 76¼. However, he said the 5.35% notes due 2020 were “down a half point from a week ago,” trading at 83.

Another trader said the 7.7% notes due 2043 were “about unchanged,” trading “around 76.”

Meanwhile Quiksilver Inc. paper “popped...a lot,” a trader said, after the company filed for Chapter 11 protections late Wednesday.

The filing was a so-called “prepackaged” deal that would swap out $279 million of secured bonds for new equity.

In the energy space, Basic Energy Services Inc. bonds were down a considerable amount – as much as 5 points, according to one trader – as the oil well services company released its August operations update.

Also, Chesapeake Energy Corp. continued to be active. The name has been busy – and better – since announcing a new gas gathering agreement with the Williams Cos. on Tuesday.

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