Distressed bonds mixed, Fed minutes released; 21st Oncology rebounds; Walter Energy debt rises

By Stephanie N. Rotondo

Phoenix, July 9 – The distressed debt market was mixed in midweek trading, as the Federal Reserve released the minutes from its June meeting.

Late in the afternoon, the central bank released the minutes from its June 17-18 meeting. The minutes showed how the Fed plans to end its bond repurchase program come October and gave new preliminary details as to how interest rates would be controlled moving forward.

However, the interest rate plan was not written in stone, as members are continuing to discuss the best route to take.

21st Century Oncology Inc. – whose bonds have moved “smartly lower” over the last few sessions, according to a trader – managed to regain ground on Wednesday.

The 8 7/8% notes due 2017 “bounced off their lows,” the trader said, deeming the issue up over a point at 98½.

The 9 7/8% notes due 2017 were meantime half a point better at 77½.

On the back of pricing its new $320 million add-on, Walter Energy Inc.’s 9½% notes due 2019 ticked higher as well.

The bonds had initially traded lower on Tuesday after the deal came at the discounted price of 99.

On Wednesday, a trader called the issue up almost a point at par ½.

Among other coal producers, Arch Coal Inc.’s 7% notes due 2019 drifted down almost a point to 74¾.

In the retail space, Toys “R” Us Inc.’s 10 3/8% notes due 2017 put on a point to close at 86 ½, according to a trader. RadioShack Corp.’s 6¾% notes due 2019 were also a point higher, ending at 43.

However, the trader said J.C. Penney Co. Inc.’s 6 3/8% notes due 2036 were “down slightly” at 83½.

But another trader called the 5.65% notes due 2020 up half a point at 89 bid.

As for Sears Holdings Corp.’s 6 5/8% notes due 2018, they closed unchanged at 92.

NII names new president

NII Holdings Inc.’s 10% notes due 2016 came in a bit – albeit in limited trading – to close around 29 7/8, a trader said.

The Reston, Va.-based provider of Nextel mobile phone service in Mexico and Latin America announced Tuesday that Salvador Alvarez had been named president of its Nextel Mexico unit.

Alvarez takes his post July 14. He will replace John McMahon, interim president, who will leave the company entirely on July 30.

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