Alpha Natural to idle Cherokee mine, sector ends mostly soft; Toys ‘R’ Us stays in retreat

By Stephanie N. Rotondo

Phoenix, June 27 – The distressed debt market was a little soft going into the weekend, traders reported.

Traders also remarked that liquidity was thin, blaming that on it being a summer Friday.

The coal sector was mostly weak across the board as Alpha Natural Resources Inc. said it was idling a mine in Virginia. The idling was due in part to low demand for the commodity.

Arch Coal Inc.’s bonds were also seen down a quarter-point across the board.

In Walter Energy Inc. paper, a trader said the bonds were actually better.

Toys “R” Us Inc. debt meantime continued to decline. The bonds have been slowly drifting lower for most of week, but were further pressured on Thursday when Fitch Ratings downgraded the debt.

Late last week, Toys “R” Us announced that it had fired its chief financial officer, F. Clay Creasey Jr. No reason was given for the termination, but the company has not been faring well financially, as stores like Wal-Mart Stores Inc. and Amazon.com Inc. take away market share.

The rest of the retail sector was on the mixed side.

Caesars Entertainment Corp., however, was inching higher, even as the Las Vegas-based casino operator said it was shuttering its Showboat casino in Atlantic City due to dropping revenues and high property taxes.

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