ATP Oil & Gas bonds decline; Kodak slips amid jobs cuts, management exits; broad market strong

By Stephanie N. Rotondo

Phoenix, Sept. 10 - Distressed debt was on the firm side Monday, aside from a few news-driven names that did not follow the day's trend.

ATP Oil & Gas Corp. came in a touch, taking one trader by surprise. He said he had expected the bankrupt oil company's debt to strengthen on news that Plains Exploration & Production Co. had purchased some Gulf of Mexico oilfields, which could indicate a renewed interest in the area.

Most of ATP's assets are in the Gulf.

Meanwhile, Eastman Kodak Co. slipped a bit after the company announced more job cuts and a change in management structure.

ATP debt slips

A trader said ATP Oil & Gas' 11 7/8% notes due 2015 were down half a point to 261/2.

He said the volume in the name was lower than usual.

"For them, they were very inactive actually," he said.

But another trader said the credit remained the bond du jour, though he also saw the paper slipping to a 26-26½ context.

"I thought the bonds would have perked up on the Plains Exploration news," he said, referring to the announcement that the oil company was buying oilfields located in the Gulf of Mexico from BP plc and Royal Dutch Shell plc from $5.55 billion.

The trader said that perhaps the sale indicated a renewed interest in Gulf oilfields, which is where ATP has a majority of its assets.

Kodak weakens on job cuts

Eastman Kodak's bonds softened Monday as the company announced another round of job cuts and changes to management.

One trader said the 7¼% notes due 2013 fell to 13 bid, 14 offered from 13½ bid, 14½ offered previously. But he thought the 9¾% notes due 2018 had inched up to 65 bid, 66 offered.

A second trader said both issues were down, seeing the 7¼% notes at 13½ bid, 14 offered and the 9¾% notes at 64½ bid, 65 offered.

Since the beginning of 2012, the bankrupt Rochester, N.Y.-based company has cut about 2,700 jobs. Kodak said Monday it intended to chop up to 1,000 more by the end of the year, which would result in annual cost savings of $330 million.

Additionally, the company said that Philip J. Faraci, president, and Antoinette P. McCorvey, chief financial officer, would be leaving their positions.

Rebecca A. Roof will step in as interim CFO. Roof is a managing director at AlixPartners, Kodak's restructuring advisory firm.

Broad market gains strength

In the rest of the distressed arena, a trader said Axtel SAB de CV's 9% notes due 2019 gained over a point to close around 64, while Momentive Performance Materials Inc.'s 9% notes due 2021 also earned over a point to end around 751/4.

Clear Channel Communications Inc.'s debt continued to gain momentum, with a trader seeing the 10¾% notes due 2016 and the 6 7/8% notes due 2018 up a point apiece, at 68 and 541/4, respectively.

A trader also said that AMR Corp.'s benchmark 6¼% convertible notes due 2014 were moving up, quoting the notes at 65 bid, 65¼ offered.

On the downside, Nokia Corp.'s 6 5/8% notes due 2039 dipped half a point to 79.

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