Distressed bonds continue to weaken with market; coal sector taking hits; Penney closes softer

By Stephanie N. Rotondo

Phoenix, Aug. 7 - Distressed debt was again trading down during the midweek session.

The coal sector especially was taking a beating. A trader said Arch Coal Inc.'s 7% notes due 2019 dropped almost 3 points to 771/4.

The trader also saw Alpha Natural Resources Inc.'s 6% notes due 2019 at 811/4, down over 2 points, while the 6¼% notes due 2021 slipped to 791/4.

A second source pegged the 6¼% notes at 79 bid, losing nearly 2 points on the day.

A third trader saw Alpha's 6¼% notes trading in a 79 to 80 ZIP code, which he called "down a little bit more."

Meanwhile, J.C. Penney Co. Inc.'s bonds "continued to be weak," a trader said.

The 6 7/8% notes due 2015 were trading around 89, he said, and the 5.65% notes due 2020 were in a 69 to 70 context.

Exide Technologies Inc.'s 8 5/8% notes due 2018 were seen coming down 1½ points to 631/2. But another trader said the debt was up.

He also placed the issue around 631/2.

Dex rises with earnings

DexMedia Inc., the company formed by the former Dex One Corp. and SuperMedia Inc., released earnings on Wednesday.

While one trader said that the earnings "didn't look all that good to me," the Dex One 14% notes due 2017 were rallying.

The trader pegged the issue around 70.

Another trader quoted the issue at 69½ bid, 70 offered, which he said was "up a bit.

"Odd pieces have been trading in the mid-60s," he noted.

The two companies merged on April 30 and have been working to integrate operations.

For the second quarter, Dex saw a net loss of $68 million. Revenues were $345 million.

Print advertising sales dipped 21.8%, but digital ad sales were up 6.2%.

Lantheus under pressure

Lantheus Medical Imaging Inc.'s 9¾% notes due 2017 have seen two consecutive sessions of declines ahead of the company's earnings release on Thursday.

A trader said the debt dropped "another 2 points" to 811/2.

The paper had fallen to levels around 83 on Tuesday.

Lantheus is a N. Billerica, Mass.-based medical imaging company.

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