Edison Mission Energy debt continues to soften post-filing; Alcatel-Lucent paper climbs higher

By Stephanie N. Rotondo

Phoenix, Dec. 19 - The distressed debt arena was moderately firmer Wednesday, following the trend of the broader high-yield market.

"Nobody is really making any big moves," a trader said.

However, new high-yield issues - combined with an upcoming holiday - kept distressed situations on the backburner.

Edison Mission Energy continued to be on the active side, following the company's Monday bankruptcy filing. However, some of the gains that had been incurred post-filing have been coming off. That was the case on Wednesday, as the paper dropped a touch.

Meanwhile, Alcatel-Lucent bonds have been increasing in the last couple of sessions, following news out late last week about a new financing agreement. The debt continued to gain on Wednesday.

Edison Mission powering down

Edison Mission Energy debt slipped some in midweek trading, according to market sources.

One trader saw the 7% notes due 2017 fall fractionally to 541/4, on about $14 million traded.

Another source placed the company's bond issues - which tend to trade in line with one another - at 53½ bid, 54½ offered, down a point.

A third trader called the paper "a little lower" at 53½ bid, 54 offered.

All of the company's bonds trade flat, or without accrued interest.

The securities had run up on Monday after the company said it was seeking Chapter 11 protections. The filing came a month after missing a $97 million coupon.

Another coupon came due on Monday as well.

Edison Mission, a unit of Edison International Inc., is a Santa Ana, Calif.-based power producer. Upon exiting bankruptcy, Edison International will divest its stake in the unit.

Lucent bonds remain strong

A trader saw Alcatel-Lucent's 6.45% notes due 2029 moving up over 2 points on the day to 73½ bid.

Another market source quoted the issue at 73 bid, 73¼ offered, compared to 71¾ bid, 72¾ offered previously.

Last week, the Paris-based telecommunications company secured $2.1 billion in new financing from Goldman Sachs & Co. and Credit Suisse. While the new funds are expected to help the company deal with debt maturities and other restructuring issues, the deal came at a high interest rate.

Additionally, certain major patents were put up for collateral.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.