Nortel Networks, Energy Future and Verso Paper bonds continue to be driven by recent news

By Stephanie N. Rotondo

Phoenix, July 28 – Recently topical distressed names such as Nortel Networks Corp., Energy Future Holdings Corp. and Verso Paper Corp. continued to trade around on Monday.

However, even liquidity in those names was thin.

“It’s really the summer doldrums, for sure, especially on Mondays,” one trader said.

“Nobody was really that active,” said another trader.

Nortel was making headlines at the end of last week as the company said its U.S. unit, Nortel Networks Inc., had agreed to a deal with bondholders on a $1.01 billion interest cap. The news came out after the market closed on Thursday, resulting in a 4- to 5-point gain for the debt in after-market dealings.

A trader said the name remained on the active side Monday, but ended “basically the same” as where it went out Friday.

Energy Future Holdings, or TXU as it is more commonly referred to, was meantime weaker by Monday’s close. The bankrupt energy producer was also in the news late last week, after having to scrap a pre-bankruptcy agreement with creditors.

And, Verso Paper’s bonds were coming in a little as well. Last week, the papermaker amended an exchange offer in order to get more participation. The exchange offer must meet required minimum thresholds in order for the company’s proposed merger with NewPage Corp. to go through.

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