Toys ‘R’ Us trades actively, better; 21st Century Oncology rebounds; NII Holdings bonds firm

By Stephanie N. Rotondo

Phoenix, July 22 – Toys “R” Us Inc.’s bonds were edging higher in Tuesday’s distressed debt market, though there did not appear to be any fresh news to act as a catalyst.

One trader said the 7 3/8% notes due 2018 rose a quarter-point to 77¼, while the 10 3/8% notes due 2017 gained almost a point to 86½.

However, another market source pegged the 7 3/8% notes at 76¾ bid, down a point on the day.

The name was also one of the more actively traded names under the distressed umbrella, taking that title from 21st Century Oncology Inc.

21st Century’s debt continued to be volatile, however, though liquidity thinned out a bit. A trader said the 9 7/8% notes due 2017 regained 11 points to close at 66½.

“That’s quite a volatile little number there,” he said of the issue.

The bonds were rising throughout the day, opening around 63 and moving up to eventually close with a 66 handle, according to another market source.

The source saw the issue finishing Monday’s session at 55.

In NII Holdings Inc., those bonds were firmer on the day, but like Toys “R” Us and 21st Century, there was no real news to drive the gains.

One trader deemed the 10% notes due 2016 up a quarter-point at 29 ¼ and the 8 7/8% notes due 2019 up half a point at 40.

Coal stays soft

The coal space remained weak Tuesday, even as Peabody Energy reported improved sales from its Australian and western U.S. mines.

Despite the better sales results, Peabody said it expected the metallurgical coal arena to remain under pressure.

A trader said Alpha Natural Resources Inc.’s 6¼% notes due 2021 dropped 2 points to 65, though another source called the issue off just 1 point at 67 bid.

Late Monday, Arch Coal Inc. reported that it was idling its Cumberland River Complex. The company said the closure was due to “currently challenged metallurgical coal markets” and that it was “striving to enhance [its] overall competitive cost position in Appalachia.”

Come Tuesday, Arch’s bonds were trading down with the rest of the sector.

A trader called the 7% notes due 2019 down a quarter-point at 69¼, while the 9 7/8% notes due 2019 fell almost 2 point to 77¾.

Arch further said that the closure would lower its metallurgical coal sales forecast to 6.3 million to 6.9 million tons, down about 200,000 tons from the previous estimate.

As for Walter Energy Inc.’s 8½% notes due 2021, those were seen “down almost a point” at 53¼.

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