Vantage Drilling contract nixed; Navistar numbers pressure bonds; Bombardier inches higher

By Stephanie N. Rotondo

Phoenix, Sept. 2 – While overall liquidity in the distressed debt marketplace remained thin Wednesday, fresh news was pushing around certain names.

Vantage Drilling Co. bonds took a hit after the Cayman Islands-based offshore driller said it had received a contract termination notice from Petrobras America, Inc. and Petrobras Venezuela Investments & Services BV.

The company announced “some kind of legal issue,” a trader said.

“It didn’t bode well for the bonds,” he said.

Navistar International Corp. was also weaker, following “disappointing earnings,” a trader said. In addition to the dismal numbers, the heavy-duty truck and engine manufacturer said it was facing regulatory actions due to its disclosure practices.

On the upside, Bombardier Inc. paper improved slightly after the company said its Chinese joint venture had won a $381 million high-speed train contract.

Also gaining were Claire’s Stores Inc. bonds as the jewelry retailer reported earnings.

Goodrich Petroleum Corp.’s preferreds rebounded on Wednesday after the company announced it was privately exchanging 5% convertible senior notes due 2032 for $27.5 million of new 5% convertible senior notes due 2032.

Looking to Puerto Rico news, the commonwealth’s state-owned Puerto Rico Electric Power Authority reached an agreement with some of its creditors overnight to cut the company’s $9 billion outstanding debt by a third, according to a statement from the authority.

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