ATP Oil, Patriot Coal curtail losses, end unchanged, slightly firm; Caesars rises with market

By Stephanie N. Rotondo

Portland, Ore., May 24 - The distressed debt market "didn't have a ton of direction," a trader said Thursday.

"It's just the same kind of stuff that has been seesawing back and forth," he added. "Some stuff was clawing back."

Another trader said energy and energy-related names - like coal and oil - continued to be the main focus, aside from higher-grade credits like Ford Motor Co.

In the energy space, names like Patriot Coal Corp. and ATP Oil & Gas Corp. managed to stem their recent losses, ending Thursday session unchanged to slightly better. Edison International Inc., however, remained on the weak side.

Meanwhile, Caesars Entertainment Corp. was one of those names "clawing back." The bonds were up at least a point on the day, though on no particular news.

Energy names modestly better

A trader said ATP Oil & Gas' 11 7/8% notes due 2015 were up a point in active dealings, ending at 511/2.

However, another trader said the issue was "not really changed," quoting it at 51 bid, 52 offered.

Patriot Coal's 8¼% notes due 2018 meantime managed to put on nearly 2 points, closing at 48¾ bid, according to a market source. Those bonds had declined 10 to 12 points on Tuesday on concerns about the company's ability to secure new financing ahead of its March 2013 debt maturities.

General concerns about the coal sector had also pressured Patriot's debt, as well as that of sector peer Alpha Natural Resources Inc.

But Alpha Natural too was on the rise. A trader called the 6% notes due 2019 half a point higher at 89 5/8, while the 6¼% notes due 2021 gained over a point to end at 891/4.

Another market source placed Alpha's 6¼% notes at 89¼ bid, up nearly a point on the day.

But while coal and oil managed to hold on during the session, energy producer Edison International did not.

A trader said the 7% notes due 2017 linked to Edison Mission Energy were down "another point-and-a-half" on "no particular news." He pegged the paper around 57.

For its part, the price of U.S. crude oil - which can play a role in how energy-related bonds perform - increased Thursday, after several consecutive sessions of declines.

The price per barrel rose 70 cents to $90.60.

Caesars bonds rebound

There was no news out on Caesars Entertainment Thursday, but as the overall market attempted a modest rally, so did the Las Vegas-based casino operator's debt.

A trader called the 10% notes due 2018 a point better at 671/4, while another market source saw the debt ending even higher at 67¾ bid.

Also curtailing its recent weakness was NewPage Corp. A trader said the 11 7/8% first-lien notes due 2014 were "a little bit better" at 633/4.

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