Cliffs Natural stays active on earnings; Arch ends mixed; Walter, Affinion set to report

By Stephanie N. Rotondo

Phoenix, Oct. 29 – Distressed bonds held up relatively well Wednesday, even as the Federal Reserve’s Federal Open Meeting Commission said that it would in fact end its bond repurchase program this month.

In a statement released Wednesday, the committee said that it was optimistic about the labor market and a declining unemployment rate. However, interest rates are being kept at near-record lows for the time being.

As for the day’s distressed activity, it was being driven by a recent round of earnings, as well as pending numbers.

Traders said Cliffs Natural Resources Inc.’s bonds were unchanged to slightly lower on the day, following the company’s earnings announcement after Monday’s close. Come Tuesday trading, the bonds had improved by 3 to 4 points.

Traders also gave mixed reports on Arch Coal Inc., which put out numbers on Tuesday.

On tap for Thursday are earnings from Walter Energy Inc. and Affinion Group Inc. While a trader said Walter was “pretty dead” during the session, Affinion’s 7 7/8% notes due 2018 were seen a couple points weaker.

One trader said the debt was “down significantly from a couple days ago,” placing the issue at 75˝ – a 4-point decline.

Another trader deemed the debt “a couple points lower” in a 75˝ to 76 context.

“Maybe people are just taking some profits ahead of the numbers,” the trader said.

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