Distressed market ticks up; NII improves post-earnings; commodities remain under pressure

By Stephanie N. Rotondo

Phoenix, March 11 – Liquidity remained constrained in the distressed debt market during midweek trading, but there was some strength in the space.

Bankrupt NII Holdings Inc., for one, moved up “a couple points,” according to a trader. The gains came on the heels of the company’s earnings release late Tuesday.

The commodity arena, however, continued to be under pressure.

A trader said Cliffs Natural Resources Inc.’s 5.95% notes due 2018 – one of four issues that are currently the subject of a tender offer – slipped to an 80 to 81 context.

“Clearly all the bonds have been under pressure,” he said.

The iron ore producer announced the tender offer on Feb. 27. It is the second time the company has attempted such an exchange and the buzz is that the latest go-round is not faring well.

Meanwhile, Walter Energy Inc.’s debt was “a good bit weaker,” a trader said. He noted that there was news that the company had hired legal counsel to advise the coal company on a potential restructuring.

In the oil arena, Energy XXI Ltd.’s 3% convertible notes due 2018 fell 1.5 points to 36, even as the company’s stock rose 4.9 cents, or 1.49%, to $3.3999.

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