RH Donnelley LCDSs settle in line with analyst expectations
An auction to cash-settle loan credit default swaps (LCDSs) referencing North Carolina-based commercial search firm RH Donnelley produced a recovery rate of 78.125%. Auctions to cash-settle LCDSs on two of the firm's subsidiaries, Dex Media East and Dex Media West, yielded recoveries of 77.25% and 82.875%, respectively.
It follows a cash-settlement auction for CDSs linked to RH Donnelley on June 11, which produced a recovery rate of just 4.875% for senior unsecured debt. The company and its subsidiaries filed for Chapter 11 bankruptcy on May 28.
Analysts at Morgan Stanley in New York said the results were broadly in line with market expectations. The wide disparity between recoveries on LCDSs and CDSs referencing the firm was reflective of low recovery rates on bonds since the beginning of the year, they added.
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