TXU bonds lower, Sun Products firms; MGIC, Radon converts off; Puerto Rico slide halted

By Paul Deckelman

New York, July 16 – Texas Competitive Electric Holdings Co. LLC bonds were seen having moved lower in active trading on Wednesday, although distressed market participants did not see any new developments out on the company, which is part of Energy Future Holdings Corp., the bankrupt successor to the company formerly known as TXU Corp.

Elsewhere, Sun Products Corp.’s bonds – which fell on Friday after Moody’s Investors Service downgraded the company’s ratings and which have been struggling to rebound ever since – managed to firm from those recent lows, traders said.

In the convertibles market, MGIC Investment Corp.’s paper was trading around at lower levels on an outright basis – though slightly better on a hedged basis – after the mortgage insurer reported disappointing earnings that sent its shares 7% lower.

Sector peer Radian Group Inc. meanwhile saw its two convertible bond issues trade mixed. The bonds of both companies have been fairly busily traded the last few sessions after the Federal Housing Finance Agency unveiled proposed liquidity rules for mortgage insurers.

And Puerto Rico’s battered bonds and those of the island commonwealth’s public agencies, such as its local power authority, were seen by market sources to have finally stanched the bloodletting seen in recent sessions following the legislative vote in favor of allowing those entities to restructure their debt – which in turn led to ratings downgrades from the major credit agencies.

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