Distressed market seen quiet heading into holiday, Abengoa falls, Vantage seen quiet

By Paul Deckelman

New York, Sept. 4 – Distressed-debt traders saw little going on Friday in most names, given the overall quiet conditions in the larger high yield market ahead of the three-day Labor Day holiday weekend.

Bonds experienced a mostly quiet and abbreviated session, with trading desks lightly staffed and many market participants making an early day of it.

Fixed-income markets in the United States, including the high-yield and distressed market, will be closed on Monday.

Spanish renewable energy provider Abengoa SA’s bonds were seen off sharply on the news the company has retained Lazard Ltd. in an advisory capacity, with some investors fearing that it may ultimately embark upon a debt restructuring.

Back among the domestic issues, with crude prices seen lower for the first time in several sessions, the traders reported slightly softer prices in names such as SandRidge Energy, Inc. and Linn Energy LLC, but volume was not convincing.

They reported no fresh activity in Vantage Drilling Co. paper, which had fallen sharply at mid-week on the news that Brazil’s state oil company had abruptly terminated a long-term contract to lease one of Vantage’s maritime energy drilling vessels.

In the convertibles market, Vipshop Holdings Ltd.’s notes sold off sharply as investors eyed the potential for more pain ahead for China, the world’s second largest economy.

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