Momentive bonds sink on restructuring fears

摘要

Bonds from momentive performance materials have slid 65% in a matter of weeks, raising fears of a debt restructuring and dashing hopes that private-equity owner Apollo will step in to help. The chemical maker's 11.5% subordinated high-yield 2016 bonds are trading at just 28% of face value, after starting the year around 70 cents and pushing up to 82 cents in late January. Two market sources told IFR that the slide was triggered by the appointment of blackstone as advisers to the subordinated bondholders, which has many speculating about a restructuring. "A few months ago, it looked like the consensus view was that Apollo would offer some kind of exchange on the subordinated bonds in the mid-70s," said Jon Brager, a high-yield analyst at Hermes Credit, which did not own the bonds.