Central European Distribution steady after downgrade, nixed debt exchange; Ameren, ATP climb

By Stephanie N. Rotondo

Phoenix, March 19 - A trader said that the theme of the distressed debt market on Tuesday was "kind of unchanged."

On top of that, volume in distressed was light given that new issues - particularly those from Chesapeake Energy Corp. and CenturyLink Inc., which priced late Monday - were dominating.

Central European Distribution Corp.'s bonds held in even as the company said late Monday that it was scrapping an exchange offer for its convertible notes. However, the Warsaw, Poland-based vodka distributor said it was going ahead with a vote on an amended restructuring plan that would include a bankruptcy filing.

Meanwhile, energy and related credits were on the rise, though not necessarily on specific news.

CEDC holds its ground

Central European Distribution's long-term credit rating was cut to SD from CC by Standard & Poor's on Tuesday, following a late Monday announcement that an exchange offer for its convertible notes had been canceled.

The deadline for a restructuring offer on the 9 1/8% notes due 2016 was extended to April 4.

The 9 1/8% notes were holding in despite the news. One market source called the issue unchanged to down slightly, trading around 79.

Another trader saw the issue at 78 bid, adding that he thought the issue might be trading flat, or without accrued interest.

In a statement, the vodka distributor said that the convertible debt swap was being canceled due to a competing offer made by Roust Trading Ltd., a major stakeholder in the company. Instead, the company's board has decided to throw their support behind the competing plan and move forward with a vote on a restructuring plan that would include a bankruptcy filing for the parent and its U.S. subsidiaries.

The 3% convertible notes were to have matured on March 15.

Energy, oil names rise

A trader said that AmerenEnergy Generating Co.'s bonds were rebounding after slipping in the previous session.

The trader pegged the 7% notes due 2018 at 75 and the 6.3% notes due 2020 at 70.

ATP Oil & Gas Corp.'s 11 7/8% notes due 2015 were also up again, as an auction of assets nears. The trader quoted the issue at 6½ bid, 6¾ offered.

And, Edison Mission Energy paper - all of which trade in line with one another - were deemed "strong," trading in a 53 to 53½ context.

Broad market goings-on

Also in the distressed space, a trader said NII Capital Corp.'s 7 5/8% notes due 2021 were "pretty active," though unchanged at 721/2.

"They've rebounded from their recent lows in the high-60s," he said.

Another trader said Ambac Financial Group Inc.'s debt - another one where the bonds trade in line - hit "another new high," ending around 68.

At yet anther desk, a trader said Caesars Entertainment Corp.'s 10% notes due 2018 were busy, but unchanged at 663/4.

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