Rite Aid retreats on Amazon competitive fears, Toys ‘R’ Us off on auctions; energy steady

By Paul Deckelman

New York, Oct. 11 – The high-yield bond market was largely dominated by investor interest in all of the new and recently priced deals on Wednesday, traders said, pushing dealings in the bonds of distressed or underperforming companies largely to the side.

But here and there were notable names in the latter space.

Rite Aid Corp. bonds were on the slide for a second consecutive session, with traders noting drugstore industry jitters over whether retailing giant Amazon.com plans to move into the prescription pharmacy business the way it recently muscled its way into the grocery world with its purchase of the upscale Whole Foods supermarket chain.

Toys ‘R’ Us Inc. bonds fell, as auctions set the final settlement prices for credit default swaps linked to the bankrupt specialty retailer’s bonds and bank loan debt.

Also in the retailing sphere, traders saw a slight pullback in Neiman Marcus Group’s paper, after that department store operator’s notes had firmed smartly in Tuesday’s action.

Energy issues such as California Resources Corp., which had also been on the march on Tuesday, were likewise seen to have taken a step back – or at least sideways – on Wednesday.

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