Little activity seen in distressed universe; supermarkets continue to suffer; energy mixed

By Paul Deckelman

New York, Aug. 30 – Activity was low-key in the distressed bond market on Wednesday, traders said, in line with a generally quieter tone in the overall high-yield market with the impending Labor Day holiday break in the United States fast approaching.

But bonds of supermarket companies like Fresh Market, Inc., Ingles Markets, Inc. and Albertsons Cos. LLC continued to trade fairly actively for a generally quiet session, with most of that paper again being pushed lower on investor fears that the newly completed merger between sector peer Whole Foods Market and retailing giant Amazon.com – and the latter company’s initiative to slash prices at its new unit – could force the others in the industry to do likewise, meaning lower revenues and earnings.

Energy issues were seen as a mixed bag, even as Hurricane Harvey continued to wreak havoc along the U.S. Gulf Coast region, doubling back on its earlier path and pushing into Louisiana. Names like Denbury Resources Corp. and EP Energy Corp. were seen lower on the session, while Jones Energy Holdings and drillers Ensco and Atwood Oceanics made up for some lost ground.

In the emerging markets arena, traders said that Venezuela’s sovereign debt and the bonds of that country’s state-owned energy monopoly, Petroleos de Venezuela SA, were trading at the low end of their recent ranges on Wednesday; those sources said that the news that Cantor Fitzgerald LP has stopped trading Venezuela debt on the heels of U.S. restrictions imposed on trading last Friday did not at this point seem to be having much impact – but could weigh on the troubled Latin American nation’s debt further down the road.

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