AK Steel debt rises on bullish Credit Suisse report; Caesars Entertainment’s bonds climb

By Stephanie N. Rotondo

Seattle, June 8 – The midweek trading session saw the distressed debt market posting more gains for the week.

In the commodity arena, AK Steel Holdings Corp. bonds were trading better, as Credit Suisse analysts released a bullish report Wednesday morning. In the report, the investment bank projected that steel prices would continue to gain ground, which would in turn help AK Steel’s bottom line.

One trader said the 7 5/8% notes due 2020 were up 3 points at 83½, while the 7 5/8% notes due 2021 improved half a point to 79.

He also saw the 8 3/8% notes due 2022 rising a point to 78.

Meanwhile, debt linked to Caesars Entertainment Corp.’s bankrupt Caesars Entertainment Operating Co. unit continued to rise. The paper began to trade up on Tuesday after U.S. Bankruptcy Court Judge A. Benjamin Goldgar told Caesars that he might have little control over pending lawsuits against the bankrupt opco’s parent, given that judges in those cases already have enough information to issue a ruling.

The parent had been seeking a stay on the proceedings, brought by bondholders who allege that the company stripped the operating company of assets and ultimately placed it in bankruptcy.

On Wednesday, the Las Vegas-based casino operator announced that it had inked two restructuring support agreements with some bondholders. Under the agreements, the bondholders agree to stay their lawsuits.

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