Fannie Mae, Freddie Mac preferreds continue downward drift; DFC down; Walter Energy weaker

By Paul Deckelman

New York, Oct. 2 – Preferred shares of Fannie Mae and Freddie Mac were being pushed lower for a second consecutive session on Thursday. The decline came on top of the big drop seen on Wednesday following an unfavorable court ruling on investor efforts to challenge the federal government’s 2012 action sweeping the profits of the two government-sponsored enterprises into the Treasury rather than letting investors have it as dividends.

Elsewhere, familiar distressed-market name Walter Energy Inc.’s bonds were seen lower, as were such other coal credits as Cliffs Natural Resources Inc. and Arch Coal, Inc.

Also lower were oil names Samson Investment Co. and Quicksilver Resources Inc.

Away from the natural resources companies, traders saw a big drop in DFC Finance Corp.’s six-year notes, although there was no fresh news out on the provider of alternative financial services to the unbanked.

Affinion Group’s bonds remained volatile, bouncing by more than 1 point. They had lost multiple points Wednesday in the wake of big fines and refunds to customers that the federal government is ordering U.S. Bank to pay, totaling $57 million, arising out of problems with identity protection and credit-monitoring services that Affinion was supposed to have provided to those customers.

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