Distressed bonds mostly up as junk gains at quarter’s end, but Quicksilver, PDVSA punished

By Paul Deckelman

New York, Sept 30 – Distressed-debt debt names were seen mostly better on Tuesday – a far cry from Monday and from the previous few sessions, when the whole sphere had been dragged lower as the larger high-yield bond market struggled.

But with junk seen better on Tuesday – helped by some judicious quarter’s-end window dressing, a trader said – the distressed credits came along for the ride.

Many natural resources names – a sector which seemed to have taken the brunt of the market’s weakness in recent days and weeks – were seen on the rebound on Tuesday, including Samson Investment Co., Moly Corp. Inc., and coal operators Cliffs Natural Resources Inc., Walter Energy, Inc., Arch Coal, Inc. and Alpha Natural Resources, Inc.

But that good fortune was by no means universal, as some hard-hit energy names continued to get knocked around, including Quicksilver Resources Inc. and Venezuela’s state oil monopoly, Petroleos de Venezuela SA, the latter name in heavy trading.

Away from the energy and mining names, better levels were seen in Toys “R” Us, Inc., West Corp. and NII Holdings, Inc.

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