The high yield market was firm all around after experiencing a couple weeks of large outflows, according to investors. The rally in the secondary was part of a broader market movement. Here are some notable movers.
El Paso Trades Up
El Paso's 7 7/8% notes of '12 traded up two and a half points on the week, to 87. One trader said the bonds, which have been under attack for months, are finally seeing buyers coming in. He noted that Enron's recent sale of its pipeline business to NuCoastal LLC for $1.8 billion, which he said was a high value, could have also boosted investor confidence in El Paso.
Satellite TV Spins
Satellite television distributor Pegasus Communications bounced around last week, with its Pegasus Satellite Communications unit notes moving up and down three to five points each day, according to one distressed trader, who cited news of recent judgments entered against the company as a reason for the activity. The 11 1/4% notes of '10 traded at roughly 55 last Wednesday. One investor commented that movement in the bonds was indicative of the speculation of whether the company will avoid default. Moody's Investors Service downgraded the Satellite Communications unit from Caa1 to Ca early last week.
Delta Soars Higher
Delta Air Lines' 7.90% notes of '09 moved up roughly six points to 55 after dipping into the 40s in recent weeks. Investors said one reason for the jump was a rumor the airline might not seek bankruptcy protection. Delta had announced a few weeks ago that it may have to file for bankruptcy if it could not reach negotiations with its pilots union for a pay cut of 30%.