Distressed bonds mixed; Stone Energy debt rises; Bon-Ton weaker as sale, leaseback nixed

By Stephanie N. Rotondo

Seattle, June 21 – While the broader markets were mostly firm on Tuesday – helped by easing fears of a Brexit – the distressed debt market finished a bit more mixed on the day.

On the upside, a trader said Stone Energy Corp.’s bonds have “been bouncing back.” The bounce continued into Tuesday trading, as the debt improved by at least 2 points.

But on the downside, Bon-Ton Stores Inc. paper was coming in after the company said late Monday that a planned sale and leaseback of three properties had been nixed. The deal would have also allowed the company to lease back the properties for 20 years at $3.9 million per year.

The York, Pa.-based retailer did not give a reason for the cancellation, but did say that it came prior to due diligence.

Among distressed preferreds, Rex Energy Corp. said it was exchanging some of its 6% series A convertible preferred stock into equity.

The preferreds, which trade over the counter, were deemed steady day over day at $6.50. However, that was down from $6.98 at the open.

The stock (Nasdaq: REXX) was meantime off 4 cents at 76 cents.

Under the terms of the privately negotiated exchange, the company will issue 730,000 shares of common stock for 102,450 depositary shares representing a 1/100th interest in each preferred share, according to a regulatory filing.

Rex Energy is a State College, Pa.-based oil and gas exploration and production company.

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