Distressed better, but outshined by new issues; OPTI remains active, better; GM gains on sales

By Stephanie N. Rotondo

Portland, Ore., Oct. 1 - Traders deemed the distressed debt market generally stronger though new issues were still stealing the spotlight.

"The market is still firm, still more buyers than sellers," a trader said.

The trader added that accounts "still have cash coming in," noting that many don't want to do any selling.

"That makes for a very difficult secondary trading market," he said.

OPTI Canada Inc. continued to be an active one, though there wasn't any fresh news out on the company. The bonds have been slowly, but steadily climbing in active trading all week.

Meanwhile, General Motors Corp.'s benchmark paper got a boost from its monthly sales report. The report showed an over 10% increase in auto sales for the month of September.

In the retail arena, Blockbuster Inc. and Rite Aid Corp. saw their debt hanging in there, though a trader said that Rite Aid paper has been "creeping up" recently.

OPTI bonds still churning

Despite a lack of news, OPTI Canada's 8¼% notes due 2014 saw "a little more activity," according to a trader.

He called the bonds unchanged at 75¾ bid, 76 offered.

Another trader saw the 9¾% notes due 2013 bid for at par 7/8, "Leaving bonds offered." The bonds had closed at par ¾ bid, 101 the day before.

"This is one of those names where you don't see it and when you do, they keep popping up," the second trader said. "They've been kind of sticking their head up."

The trader added that "most of what I have seen in the last couple of days is always somebody selling."

OPTI Canada is a Calgary-based oilsands producer.

GM boosted by sales

Detroit-based General Motors reported its September sales figures Friday, showing a 10.5% increase year over year.

As a result, market sources saw the company's bonds trading actively and higher.

One trader pegged the 8 3/8% notes due 2033 around 341/2, while another quoted the paper at 34¼ bid, 35¼ offered.

The company said its four brands saw a 15% increase in retail sales for the month and that they had also gained market share during the first three quarters of the year.

Blockbuster steady, Rite Aid up

In the world of retail, bankrupt Blockbuster saw its 9% notes due 2012 trading around 31/4, a trader said.

Another trader echoed that level, also seeing the 11¾% notes due 2014 at 57½ bid.

Meanwhile, another trader said Rite Aid's 8 5/8% notes due 2015 were "active, but unchanged" at 861/2.

Broad market mixed

Elsewhere in the distressed realm, Takefuji Corp.'s 9.2% notes due 2011 slipped to 22 bid, 23 offered from 22½ bid, 23½ offered, a trader said.

Also in the financial space, Washington Mutual Inc. gave back some of the gains it had incurred Thursday, the trader said. He said the bank seniors - such as the 5.55% notes due 2010 - ended around 42 1/2, down from 43 bid, 43¼ offered previously.

And, Energy Future Holdings Corp.'s 11¼% notes due 2017 were "probably a smidge better" around 483/4, while the 10% notes due 2020 improved by about a point to 101 bid, 101½ offered.

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