Sprint notes nosedive as T-Mobile talks seen in jeopardy; Penney bonds continue retreat on poor guidance

By Paul Deckelman

New York, Oct. 30 – Merger and acquisition activity – or the lack thereof – was one of the key drivers in Monday’s bond market action, including in some areas that could be considered underperforming.

The prospect that the possible merger between Sprint Corp. and T-Mobile US Inc. may not take place caused Sprint’s paper to slide.

Talks between Sprint principal owner Softbank Group Corp and Deutsche Telekom AG, which controls T-Mobile, have reportedly stalled with the two sides unable to agree upon how many shares each international telecom giant would hold in the combined U.S. wireless company.

In the shrinking, consolidating power industry, traders saw Dynegy Inc.’s bonds rise solidly in active trading on the news that Vistra Energy Corp. will be buying Dynegy in a $1.7 billion all-stock deal.

Homebuilder Lennar Corp.’s bonds eased on the news that it will acquire sector peer CalAtlantic Group Inc., whose bonds firmed.

Away from M&A related news, traders saw continued erosion in retailer J.C. Penney Co. Inc.’s bonds, following the department store operator’s issuance of weak guidance numbers at the end of last week.

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