iHeart bonds trade mixed; distressed oil and gas space also mixed; Fannie, Freddie better

By Stephanie N. Rotondo

Seattle, July 24 – A trader said there was “no real activity” in the distressed debt “underworld” on Monday.

“It’s all [iHeartCommunications Inc.],” a trader said of distressed dealings.

The paper was mixed on the day as the market waited to see how restructuring negotiations with lenders and bondholders would pan out.

The oil and gas sector was also mixed, even as domestic crude oil prices ticked up.

A trader said California Resources Corp.’s 8% notes due 2022 were half a point better at 63½.

However, another market source said the bonds were down nearly 2 points at 63¾.

In MEG Energy Corp., a trader saw the 7% notes due 2024 slightly improving to close at 79½.

Fannie Mae and Freddie Mac preferreds were busy and better on Monday.

A source said there was a New York Times article over the weekend with the headline “U.S. foresaw better return in seizing Fannie and Freddie profits.”

“You could read anything you want to out of that article,” the source said.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) rose 59 cents, or 9.42%, to $6.85. Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) gained 47 cents, or 7.99%, to close at $6.35.

“It’s bizarre that the market would respond to it [so positively],” the source said of the article. “I think people were responding more to the headline than the substance.”

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