Sprint, AK Steel bonds improve on results; JBS crashes after execs accused; SandRidge soft

By Stephanie N. Rotondo

Seattle, Jan. 26 – Distressed bonds were firming up again on Tuesday, helped in part by a round of earnings that were not as bad as some had expected.

Sprint Corp., for instance, reported a better-than-expected loss for the fiscal third quarter. The results were boosted by the company’s cost-cutting efforts, as well as a gain in subscribers.

“Sprint bonds were flying,” a trader said, though he noted that paper was “higher at the open” than at the close.

Meanwhile, AK Steel Holdings Corp.’s fourth-quarter figures were far from stellar – the company swung to a loss from the previous year – but revenue and adjusted earnings came in above expectations.

In both cases, bonds rallied on the heels of the results.

Away from earnings, JBS SA saw its bonds take a dive after it was reported that prosecutors in Brazil – where the meat processor is based – had accused high-ranking executives of financial crimes.

Nine people from JBS and Banco Rural SA – which was liquidated in 2013 by Brazil’s central bank – were accused of wrongdoing involved with loans totaling about $20 million that were made in 2011.

A trader said JBS’ 7Ľ% notes due 2024 were “actively traded” on Tuesday.

The news also sent the bonds downward, the trader said, seeing the issue lose “almost 10 points” to close at 78.

SandRidge Energy Inc. paper also continued to drift down as expectations of a looming bankruptcy filing grew.

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