Joy Global takes attention away from distressed bonds; Avaya, Odebrecht make appearances

By Stephanie N. Rotondo

Seattle, July 21 – The distressed debt market again took a backseat to the broader high-yield space on Thursday, as trading in Joy Global Inc. dominated the session.

“There were tons and tons of trades [in the name],” a trader said. “That’s where all the activity was.”

The action came as it was announced that Komatsu Ltd. would acquire Joy for $2.9 billion. The news sent Joy’s debt up at least 17 points on the day.

As for distressed dealings, there were a couple of off-the-run names that were making moves.

Avaya Inc., for instance, was trading more actively, though without any news to act as a catalyst.

A trader said the 7% notes due 2019 added 1½ points to close at 75½.

Odebrecht Finance Ltd. was another rarely seen name that traded during the session.

A trader saw the 7 1/8% notes due 2042 slipping a deuce to 34½.

On Tuesday, it was reported that a sale for the company’s 55% stake in a natural gas pipeline in Peru was not going well, as banks were refusing to finance the project if Odebrecht stayed involved.

The company is currently embroiled in a corruption scandal in Brazil, which is why the banks are hesitant to pony up.

Among the more typical distressed names, California Resources Corp.’s 8% second-lien notes due 2022 drifted off a point to 69, according to a trader.

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