Distressed bonds decline amid focus on primary; Momentive higher as new rates released

By Stephanie N. Rotondo

Phoenix, Sept. 4 – The distressed debt market was weak again on Thursday, and investors were keeping their eyes on the “tons” of new issues that hit the high-yield pipeline, a trader said.

As such, liquidity in the distressed space was muted.

However, fresh news on Momentive Performance Materials Inc. helped to move that name around a bit.

Momentive released the new interest rates on replacement debt it intends to issue under its plan of reorganization. During the company’s confirmation hearing, the judge overseeing the case had given the plan the go-ahead, provided that the company increased the rates on the new debt.

In the rest of the day’s dealings, most of the trading was focused on the typical go-to distressed names, such as NII Holdings Inc.

A trader saw those bonds declining during the session, though on no fresh news. He pegged the 10% notes due 2016 as down the most, losing nearly 2 points to end around 25½.

Among the other issues, the trader said the 11 3/8% notes due 2019 fell slightly to 64, while the 7 7/8% notes due 2019 slipped a quarter-point to 63¾.

The 7 5/8% notes due 2021 were deemed unchanged at 15.

Another trader said the name was lower, seeing the 11 3/8% notes trading around 64.

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