Distressed bonds gain strength despite limited liquidity; TXU bonds weaker; PDVSA mixed

By Stephanie N. Rotondo

Phoenix, Jan. 2 - The distressed debt market "still feels like it has a generally better tone despite equities being down," a trader said Thursday.

Though most names were on the firm side, there did not appear to be any new distressed ideas as 2014 began.

For instance, NII Holdings Inc. was one of the more active names of the day, a trend that has been ongoing since about October. A trader said the 10% notes due 2016 rose half a point to end at 531/2.

The trader also saw the 7 5/8% notes due 2021 at 42 3/8, which he called nearly a point higher.

Meanwhile, Caesars Entertainment Corp.'s 10% notes due 2018 were pegged at 481/2, unchanged.

Momentive Performance Chemicals Inc.'s 11½% notes due 2016 were placed at 683/4, which was deemed a quarter-point better.

At another desk, a trader said Overseas Shipholding Group Inc.'s 8 1/8% notes due 2018 were moving up, seeing the paper trade around 112.

The trader did see some weakness in Exide Technologies Inc.'s 8 5/8% notes due 2018, which he said had drifted down half a point to a point to a 70½ to 71 context.

The first trading session of 2014 was "definitely slow," however, as market players were "doing year-end pricing and getting their head screwed back on after being out [for the holidays]," the trader commented further.

Still, another trader said there "was demand for stuff... if you could find it."

With a snowstorm expected to hit the East Coast, sources were opining that Friday's session would be as slow - or possibly even slower - than Thursday.

"Maybe we'll get back to work on Monday," quipped one trader.

TXU declines

Energy Future Holdings Corp.'s debt was among the more actively traded issues of the day.

However, the bonds were seen trending mostly lower.

One trader said there was a "fair amount of trading" in the name, seeing the 10% notes due 2020 at 1061/2.

Another trader said the 10¼% notes due 2015 linked to subsidiary Texas Competitive Electric Holdings Co. LLC were off half a point to 61/4. A second tranche of those notes was down a quarter point at 61/2.

Energy Future is a Dallas-based energy producer.

PDVSA mixed on output report

Petroleos de Venezuela SA's bonds were mixed during trading, as Bloomberg reported that oil output from Venezuela had declined.

A trader said the 6% notes due 2026 eased off half a point to 541/2, while the 8½% notes due 2017 were "up marginally" at 83 5/8.

Oil production was down for the eighth straight month, according to a survey by Bloomberg. In December, 2.45 million barrels per day came out, which was a 235,000-barrel decline from November.

The decrease was attributed to PDVSA's trouble obtaining financing to pour into much needed capital improvements.

Among other emerging market names, OGX Petroleo e Gas Participacoes SA's 8½% notes due 2018 finished the day around 9, a point higher on the day.

© 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.