PDVSA debt trades actively, mixed; Alcatel-Lucent says profit to miss, bonds drop in response

By Stephanie N. Rotondo

Phoenix, July 17 - It was a mostly firm day for distressed bonds on Tuesday, though investors were more focused on new issues and higher-grade names, according to traders.

However, Petroleos de Venezuela SA was the day's top trader, a trader reported. However, there was no fresh news out on the Venezuelan-based oil company.

Though the day was generally positive, Alcatel-Lucent SA bonds were down significantly ¾ albeit in thin trading ¾ on news the company would likely miss its full-year adjusted operating profit targets.

PDVSA active, mixed

PDVSA debt was among the day's most actively traded issues, a trader reported.

"It was the top two," he said.

About $40 million of the 9% notes due 2021 changed hands, moving up about half a point to 77 7/8.

The 8½% notes due 2017 were meantime unchanged at 853/4.

There was no fresh news out on the state-owned Venezuelan oil company.

Elsewhere in the energy realm, Patriot Coal Corp.'s 8¼% notes due 2018 were deemed "better," a trader said.

He called the issue up 3 points at 46.

Another market source deemed the paper up nearly 2 points at 43¼ bid.

Alcatel falls on profit miss

Alcatel-Lucent's 6.45% notes due 2029 were down considerably Tuesday, as the France-based manufacturer of cellular handsets warned it might not hit 2012 profit targets.

A trader said there was "only a few trades" in the notes, but the paper was trading down to 611/2. That compared to previous trading levels around 66.

Another market source called the issue down 6¾ points at 60½ bid.

Earlier this year, Alcatel said that it expected its full-year profit would rise about 3.9%. That might not be the case after all, as the company reported a loss due to a decline in demand.

For the second quarter, Alcatel posted an adjusted operating loss of $49 million. Sales came in at €3.5 billion.

Full earnings will be reported July 26.

Elsewhere in the technology space, Avaya Inc.'s 10 1/8% notes due 2015 dropped to a 77-78 context, according to a trader.

Last week, he said, bonds were in the low-80s. Late Monday, paper trade down to around 77 and held there throughout Tuesday trading, he said.

© 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.