Peabody remains on downward track; Sabine skips coupon; Colt files; MagnaChip downgraded

By Stephanie N. Rotondo

Phoenix, June 15 – It was “a brutal day” in the distressed debt market, according to a trader on Monday.

“It was a heavy day,” he said. He noted that there was some “nit-picky buying going on” and added that several bid-wanted lists were circulating.

Peabody Energy Corp. bonds continued to be in focus following a news report out Friday that indicated that company could be required to pay more for its mine liability insurance.

The debt “continues to keep getting hammered,” a trader said.

Elsewhere in the market, Sabine Oil & Gas Corp., Colt Defense LLC and MagnaChip Semiconductor Corp. all had fresh news out.

However, all those bonds were little changed.

For its part, Sabine Oil said it was skipping a $21 million coupon payment due Monday on its 7¼% senior notes due 2019.

Meanwhile, Colt Defense announced that it had filed for bankruptcy protections on Sunday after a tender offer for its 8¾% notes due 2017 failed to meet the necessary requirements.

As for MagnaChip, Standard & Poor’s downgraded the chipmaker on Monday to CCC+ from B-.

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