AK Steel trades off after new issue; oil names slip with crude; Toys ‘R’ Us debt boosted

By Stephanie N. Rotondo

Seattle, June 14 – A distressed debt trader said the “whole market was down” on Tuesday, extending the arena’s recent string of losses.

In particular, the trader said that “miners and oil were really down.”

AK Steel Holdings Corp., for instance, was off about 2 points during the session. Those losses were likely due to the West Chester, Ohio-based steelmaker’s pricing of a $380 million offering of 7½% notes due 2023 late Monday.

The company plans to use those proceeds to fund a tender offer for its 8¾% notes due 2018.

As for the rest of the structure, the 7 5/8% notes due 2020 were called 2 points weaker at 87 at one shop. Another source placed the issue at 87½ bid, down over 2 points.

In the oil space, bonds were drifting lower along with oil prices, which continued to retreat from their recent highs above the $50-mark.

A trader said Chesapeake Energy Corp.’s 8% second-lien notes due 2022 dropped 2 points to 84¾.

In Whiting Petroleum Corp. paper, the 5¾% notes due 2021 were seen trading off 2½ points to 86¾, while the 6¼% notes due 2023 fell 3½ points to 84.

The retail space was getting some action.

Toys ‘R’ Us Inc. debt was bucking the day’s downward trend, rising on the back of refinancing news that came out late Monday. Neiman Marcus Group Inc. securities, however, took a hit after the company reported weak third-quarter results.

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