Peabody, Energy XXI up ahead of new deals; Magnetation hires advisors; Hercules downgraded

By Stephanie N. Rotondo

Phoenix, March 5 – Distressed debt investors were keeping an eye on energy names yet again in Thursday trading.

However, as a snowstorm hit New York and most of the Northeast, a trader said that afternoon trading was “muted.”

“It’s pretty snowy here,” he said.

But in the day’s dealings, both Peabody Energy Corp. and Energy XXI Ltd. were prepping new deals and, as a result, their older bonds were getting a boost.

Away from the energy arena, a trader said Magnetation LLC’s 11% notes due 2018 was an “interesting” addition to the distressed radar screens.

Over the last week, he said, the bonds have lost at least 7 points. During Thursday’s session, the paper traded around 63 early on, but then fell to 59. It eventually settled in a 60 to 61 context, the trader said.

The iron ore concentrate producer said Thursday that it had hired The Blackstone Group as a financial advisor to evaluate alternative to improve liquidity.

Elsewhere, RadioShack Corp.’s credit default swaps were settled at 11½ at an auction during the session.

A trader said the company’s 6¾% notes due 2019 traded down half a point to 11½.

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