Fresh Market takes a tumble; oil and gas names remain strong as crude gains; telecom bonds trade mixed

By Stephanie N. Rotondo

Seattle, Sept. 27 – Activity in the distressed debt market picked up on Wednesday, though without any fresh news to act as a catalyst.

And, after Tuesday’s largely positive day, distressed bonds were finishing the midweek session with more of a mixed tone.

One trader noted that Fresh Market Inc.’s 9¾% note due 2023 “can’t get out of its own way,” as the debt dropped “almost 5 points” in “very active” trading.

The notes closed at 62¾, according to a trader.

Still, there was no news to cause the weakness in the name, which has been slowly trending lower ever since Amazon took over Whole Foods.

Meanwhile, there continued to be strength in the energy space.

A trader said Sanchez Energy Corp.’s 6 1/8% notes due 2023 jumped 2½ points to 86.

California Resources Corp. was meantime marginally better, according to a trader.

The trader pegged the 8% second-lien notes due 2022 at 65¼ and the 6% notes due 2024 at 45 3/8.

However, another market source deemed the 8% notes a point better at 65¾.

In Denbury Resources Inc. paper, a trader said the 4 5/8% notes due 2023 firmed 3½ points to 53¼.

A second source also saw Denbury adding a fair bit, pegging the 6 3/8% notes due 2021 at 61.

That was a gain of 3 points, the source said.

The oil and gas arena was again helped by rising domestic crude oil prices, which were buoyed on Wednesday by the latest report from the U.S. Energy Information Administration.

The report said crude inventories dropped by 1.8 million barrels last week. That compared to expectations of a 1.3 million-barrel gain.

Elsewhere, the telecom space continued to be eyed.

After trading up on Tuesday following reports of a default notice, Windstream Holdings Inc.’s debt was more mixed on Wednesday, following the day’s overall trend.

A trader saw the 7¾% notes due 2020 waned half a point to 77½, while the Uniti Group Inc.-linked 8¼% notes due 2023 were steady at 89½.

Another source called Windstream’s 6 3/8% notes due 2023 – the issue in which the default allegedly occurred – up another 1¼ points at 69¼.

Windstream said in a regulatory filing late Monday that a holder of the 6 3/8% notes had claimed a default occurred in relation to a spin-off that resulted in Uniti Group.

As for Frontier Communications Corp., its 10½% notes due 2022 were seen slipping a shade to 85¼.

The 7 5/8% notes due 2024, however, were called a quarter-point better at 76¼.

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