Distressed bonds lower ahead of Brexit vote; Advanced Micro rises; oil, gas debt ticks up

By Stephanie N. Rotondo

Seattle, June 22 – The distressed debt market was trading lower Wednesday, though amid muted trading, according to market sources.

“I think the market is just trying to get past this Brexit vote,” one trader said.

He was referring to the United Kingdom’s vote on Thursday on whether or not to stay in the European Union. The vote has caused some volatility in the markets, as opinion polls appear to show the outcome as nearly 50/50.

While the market did end with a weaker tone for the midweek session, the day’s notable distressed names were mostly moving higher.

A trader said Advanced Micro Devices debt, for instance, “continued to rally.” There hasn’t been any fresh news out on the computer chip maker to explain the rebound.

Oil and gas names were also trending up. Domestic crude ticked up to $48.95, despite fears of the upcoming Brexit vote and a smaller-than-expected drawdown of U.S. stockpiles.

The U.S. Energy Information Administration said Wednesday that crude inventories dipped 917,000 barrels last week, less than the 1.7 million-barrel draw analysts polled by Reuters had expected.

Still, California Resources Corp.’s 8% second-lien notes due 2022 edged up “a little bit” to 72, a trader said. Another market source called Denbury Resources Inc.’s 6 3/8% notes due 2021 a point better at 70˝ bid.

Elsewhere in the commodity space, a trader said AK Steel Holdings Corp.’s bonds were “pretty much unchanged” following the company’s late Tuesday announcement regarding price increases.

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