Distressed bonds find strength in wake of Fed news, oil data; Logan’s Roadhouse debt dips

By Stephanie N. Rotondo

Phoenix, June 17 – The distressed debt market saw some improvement on Wednesday, following a trend set by the broader markets.

The gains came as investors digested the latest announcement from the Federal Open Market Committee as it concluded its two-day meeting. After the meeting, Fed officials said that the U.S. economy looked to be recovering from a weak winter and that things appeared on track for an interest rate increase in September.

In addition to the Fed news, the Energy Information Administration issued its weekly crude and gas inventory reports on Wednesday, showing a drawdown of crude stockpiles but a 460,000-barrel increase in gasoline inventory.

The latter came as a surprise, given that the American Petroleum Institute had shown a 2.9 million-barrel decline in its report.

The news didn’t bode well for oil prices, especially given that the ongoing Greek drama has some speculating that oil demand will decrease in the near term.

Surprisingly enough, the new data – and resulting weaker oil prices – wasn’t weighing on the oil and gas sector all that much.

The parent company of Logan’s Roadhouse Inc., LRI Holdings Inc., released its fiscal third quarter results on Wednesday, showing a wider net loss on lower total revenues.

In the wake of the earnings announcement, a trader saw the 10¾% notes due 2017 falling a point to 73¼. At that level, he said, yield was “almost 27%.”

A conference call to discuss the results will be held on Thursday.

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