Distressed debt slips in Tuesday trading session; Exide bonds beaten up; Toys ‘R’ Us firm

By Stephanie N. Rotondo

Phoenix, Sept. 2 – The first trading day of the month – and the first back from the long holiday weekend – was a tough one for the markets, including the distressed debt market.

In equities, both the Dow Jones industrial average and the S&P 500 index finished the day modestly lower.

A trader said Exide Technologies Inc. remained under pressure, as it has been since mid-August when it was announced the company was under a grand jury investigation for the leak at its Vernon, Calif.-based recycling plant.

The trader said the 8 5/8% notes due 2018 fell 4 points in Tuesday trading to 36½.

Another market source echoed that level, “so down a few points,” he said.

In a regulatory filing made Aug. 15, Exide said it had received a grand jury subpoena on Aug. 8 “in connection with a criminal investigation involving its Vernon, California, recycling facility.”

The plant was closed by state regulators after nearby arsenic levels were found to be unsafe.

The Milton, Ga.-based battery manufacturer and recycler filed for bankruptcy protections in 2013.

Before the holiday weekend, Toys “R” Us Inc. reported its second-quarter results, showing a wider loss than the previous year.

However, once market players returned from the long weekend, the Wayne, N.J.-based retailer’s bonds were trending higher.

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