NewPage slips on CEO exit, numbers; Sprint notes steady to softer; Lyondell bonds move higher

By Stephanie N. Rotondo

Portland, Ore., Jan. 19 - The distressed debt market was rather sluggish Tuesday, as market players returned to their desks after a three-day weekend.

"Volume was really light today," said one trader, adding, "I don't think we even made it to $1 billion [in total turnover]."

"The common theme that I am seeing is it is a typical useless day after a three-day weekend," he added.

But some credits definitely got some use out of the day. NewPage Corp., for example, was one of the day's more active names, though the bonds were seen drifting lower. The decline came as the company announced the departure of its reigning chief executive and also posted preliminary fourth-quarter results.

Elsewhere, Sprint Nextel Corp.'s debt was steady to softer on the day. On Tuesday, Sprint's equity was downgraded as the company's rivals decreased some pricing plans.

LyondellBasell's bonds were meantime up well over 5 points on the day, as the company got an OK on an exclusivity extension.

NewPage slips on CEO exit, numbers

NewPage's 10% notes due 2012 were "pretty active," a trader said, as the Miamisburg, Ohio-based papermaker announced its top executive had resigned.

The trader said the bonds were down "probably 3 to 4 points" on the news, ending around 78.

He added that the company "also put out some numbers, which I guess people took negatively."

Richard D. Willett Jr.'s resignation from the chief executive post was effective Jan. 18. He will remain as a consultant until March 31. In the interim, until a new CEO is found, former CEO and current executive chairman Mark A. Suwyn will act as CEO.

"After considerable personal reflection on my longer term career interests, I have made the difficult decision to leave NewPage to pursue opportunities in other industries," stated Willett in a press release. "A smooth transition is important to me, and I have agreed to assist Mark Suwyn and the NewPage management team as needed as a consultant to the company, and then further through a two-year consulting arrangement with Cerberus Operations."

"While there is never a perfect time for a transition, Rick and I, along with the board of directors, have mutually agreed on this timing and feel that NewPage is well positioned for the future now that the acquisition of Stora Enso North America has been successfully integrated," stated Suwyn. "Rick has made enormous contributions to NewPage over the past four years and we all wish him well in the future."

In addition to the management change, NewPage also gave preliminary fourth-quarter results in an 8-K filing with the Securities and Exchange Commission.

For the quarter, NewPage is estimating net sales between $853 million and $861 million, compared with $977 million in the same quarter of 2008.

Net loss is expected to be between $52 million and $57 million. The company posted $42 million loss in the fourth quarter of 2008 and a loss of $138 million in the third quarter of 2009.

As of Dec. 31, 2009, NewPage had $4 million in cash and equivalents and $219 million available under its revolving senior secured credit facility.

Sprint notes steady to softer

Sprint Nextel's debt was unchanged to weaker, depending on whom you asked, following an equity downgrade and concerns about pricing.

One market source saw the 6% notes due 2016 "kind of right where they have been, maybe a tad softer" at 90 bid, 90¼ offered. He said the 7 5/8% notes due 2011 - which were "busy last week," he said - were steady in that 102½ bid, 103 offered range.

Another source, however, pegged the 6% notes at 90 bid, down a deuce.

Verizon and AT&T both cut prices of certain plans Tuesday. Those price cuts were preceded by plan changes at MetroPCS, a rival of Sprint's Boost Mobile service.

According to one analyst, Craig Moffett of Bernstein, the price alterations made by Verizon, et al, put more pressure on Sprint's future.

"In retrospect, Sprint had it easy in 2009," Moffett said in a note to clients. "In pre-paid, they had the luxury of a small starting subscriber base, making net growth easy even at high churn rates. In post paid, they enjoyed something of a price umbrella; neither Verizon nor AT&T moved aggressively on post-paid pricing in 2009. Now, new pricing plans announced by Verizon and AT&T on Friday in post paid, and by PCS in prepaid, tighten a vise that leaves Sprint once again stuck in the middle."

Sprint Nextel is an Overland Park, Kan.-based wireless telecommunications provider.

Lyondell gets more time

LyondellBasell's bonds headed higher on "good volume," a trader said.

The trader called the 9.80% notes due 2020 up as much as 7 points to 81 bid, 82 offered, while the 7.55% notes due 2026 headed up about 5 points to around 80.

While he saw Lyondell's 10¼% notes scheduled to come due on Oct. 1 trading at 80, which he called up 4 points on the day, he added that this was just one trade at that level. "I didn't see a lot of volume" in that issue, he added.

The gains came as the company received an exclusivity extension on its bankruptcy case. The extension gives the company until April 15 to come up with its own plan of reorganization.

Also, the judge overseeing the Chapter 11 case turned down a creditor request that an independent examiner - who had already filed a report on certain aspects of the case - be allowed to continue examining how Lyondell is evaluating a takeover bid from India's Reliance Industries Ltd. The judge likewise nixed a creditor motion to halt "adequate protection" payments of about $40 million per month to Lyondell's first-lien lenders. Judge Robert Gerber warned that doing so would cause the company to default on its bankruptcy financing agreement.

Lyondell, based in The Netherlands, is a manufacturer of polyolefin materials.

Chemtura launches loan

Chemtura Corp. held a bank meeting on Tuesday afternoon to kick off syndication on its proposed $450 million debtor-in-possession financing credit facility, and in connection with the launch price talk was announced, according to sources.

Both the $150 million revolver and the $300 million term loan were presented to lenders with talk of Libor plus 425 basis points with a 2% Libor floor, sources said.

In addition, the term loan is being offered at an original issue discount in the 99 area, sources remarked.

Citigroup is the lead bank on the deal.

Chemtura is a Middlebury, Conn.-based manufacturer and seller of specialty chemicals and polymer products.

Sara Rosenberg and Paul Deckelman contributed to this article.

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