Possible bankruptcy marks uptick for Avaya; Peabody up on coal, possible bankruptcy exit

By Colin Hanner

Chicago, Nov. 28 – Distressed debt trading eased on Monday following an extended holiday weekend, as oil-related bonds returned to a flurry of speculation days before a potential supply cut, and regularly traded distressed names continued to react to mostly news from last week.

“Activity was very muted today following Thanksgiving,” a trader said. “It was a slow, back-to-work day.”

“People were out for multiple days, and now they’re getting off their Thanksgiving hangover,” another trader said. “People are going to start getting their heads back into it.”

Among those actively traded were technology company Avaya Inc., which is reportedly heading toward Chapter 11 protection next month. It saw an uptick in several of its distressed bonds on Monday.

Though trading was lower than usual, Peabody Energy Corp. continued to ride the momentum of rising coal prices that has made the opportunity for an exit out of bankruptcy a reality going forward, according to a report.

Media company iHeartCommunications, Inc. began a consent solicitation in which it is seeking permission to exclude some holders from future consent solicitations, and several of its distressed bonds jumped as a result.

Oil futures rose by several points on signals that Iraq would join efforts with the Organization of Petroleum Exporting Countries on Wednesday to curb an oil glut.

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