iHeart active ahead of CDS auction; Peabody up on Chapter 11 exit; GenOn movement mixed

By Colin Hanner

Chicago, Jan. 17 – Activity resumed in the distressed arena on Tuesday following the Martin Luther King Jr. holiday, with several notable distressed names trading on sector- and company-specific news.

Among those, iHeartCommunications, Inc.’s distressed securities were the “top dog” in the distressed market, a trader said, though one of its most-active securities was flat on the session.

On Tuesday, iHeartCommunications announced an auction to settle the credit derivatives trades for its credit default swaps will come at the beginning of next month.

The 14% notes due 2021 were unchanged on the session, a trader said, finishing with the 37 handle it carried over from Friday.

On top of news that the company will look to exit Chapter 11 bankruptcy, Peabody Energy Corp. announced it is seeking approval of a sale to a stalking horse bidder, though speculation driven by a Barron’s article that reported equity shareholders are trying to become part of the reorganization plan drove the company’s stock prices down.

The true gains from the catalysts seen on Tuesday were in the 6½% notes due 2020, which were up 2¼ points to 51¼, a market source said.

In energy and production, GenOn Energy, Inc. continued to move, though it saw mixed fluctuations after it was one of Friday’s most active securities.

Hospital groups Quorum Health Corp. and Community Health Systems, Inc. were also mixed.

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