Distressed bond market stays commodity-driven; Caesars inching up; Fannie, Freddie improve

By Stephanie N. Rotondo

Phoenix, July 23 – A continuation of slumping commodity prices again pressured the markets on Thursday, including the distressed debt market.

However, one trader noted that “it seemed like there were a few things that rebounded” during the session.

Consol Energy Inc.’s 5 7/8% notes due 2022, for instance, which the trader saw ending “a little bit higher” in a “+/-77” context.

Chesapeake Energy Corp. – another notable name this week – was also inching higher, with the 4 7/8% notes due 2022 closing around 80.

The trader even saw FMG Resources’ 9¾% notes due 2022 regaining ground. Another market source, however, did not paint as rosy a picture.

Elsewhere, Caesars Entertainment Corp. could face billions in creditor claims after bankruptcy court judge Benjamin Goldgar denied the company’s stay request.

Still, the opco’s second-lien debt – the 10% notes due 2018 – have been moving up the last couple of sessions, likely spurred by news from earlier in the week when the Las Vegas-based casino operator said those bondholders were jumping on board its latest restructuring agreement.

Fannie Mae and Freddie Mac preferreds continued to climb up in the wake of news regarding a recent court ruling that will force the federal government to turn over more than 10,000 documents related to the decision to place the GSEs into conservatorship.

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