Distressed bonds softer despite positive GDP; 21st Century pops on new financing; Cliffs down

By Stephanie N. Rotondo

Phoenix, Sept. 26 – The distressed debt market finished with a weak tone yet again Friday, even as most markets turned positive after new GDP data indicated that the U.S. economy grew at its fastest pace in more than two years.

The distressed space was more shaken by news Bill Gross was leaving Pimco for a competitor, Janus Capital Group.

Gross’ departure comes as Pimco has suffered from massive outflows. Chatter is that Pimco was even considering firing Gross before he resigned.

But the market, though it remained weak, did show signs of rallying.

“It was very heavy in the morning,” one trader said. “But everything seemed like it was going to bounce a little bit.”

21st Century Oncology’s notes got a huge boost at the end of the week, on news the company had received a $325 million investment. The company plans to use some of the proceeds to pay down debt.

A trader said the 8 7/8% notes due 2017 had a “smart rebound,” moving up to 103¼ from par.

“A little liquidity never hurts,” the trader mused.

However, positive news was not helpful to Cliffs Natural Resources Inc. The company has reportedly received some interest on its Australian assets as the company looks to shed non-core businesses.

But the news failed to stem the company’s recent string of losses, as the bonds were again diving on Friday.

© 2015 Prospect News.
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