NewPage notes gain ground; Shinsei active on loss speculation; First Data up on Intel numbers

By Stephanie N. Rotondo

Portland, Ore., April 14 - The distressed debt market was "very strong," a trader reported Wednesday.

"It was definitely a crazy day," said another trader. "Tons and tons of trading going on." He noted that total volume in the secondary world came to around $3 billion, "which is just crazy for our market."

And, while new issues continued to make up a big hunk of trading, "I think everything traded," he said.

NewPage Corp. benefitted from the stronger tone, as its bonds improved a few points on the day - and that without any fresh news to speak of.

Elsewhere, Shinsei Bank Ltd. was one of the day's volume leaders. News published Wednesday indicated that company was preparing to post a rather large loss for its most recently completed fiscal year.

In other earnings-related news, First Data Corp.'s bonds inched up about 2 points on the day, traders said. One trader opined that good numbers from Intel Corp. were the reason.

Visteon Corp.'s notes continued to trend higher, though trading in the credit was thin. Still, some market players are wondering just how high the bonds - currently trading at or above par - can possibly go.

And, General Growth Properties Inc. saw its debt improving, following another takeover bid from Simon Property Group.

NewPage notes gain ground

NewPage bonds traded actively, and better, in midweek trading, sources reported.

Several sources deemed the 10% notes due 2012 up a couple points to around 76, down from the day's high of "77-ish," a trader said, but still well above Tuesday closing levels.

One source noted that about "$50-odd million" of the paper changed hands.

There was no fresh news out on the Miamisburg, Ohio-based papermaker, though there were some reports out that indicated pulp and paper prices would increase in May.

NewPage is expected to release its first quarter 2010 results on May 6. A conference call to discuss the results has been scheduled for 11 a.m. ET.

Shinsei active on loss speculation

Shinsei Bank's 7.16% notes due 2049 were seen as one of the day's most active issues as Bloomberg reported that the company is expected to post a full-year loss for the period ending March 31 and that it would likely cancel a planned merger.

A trader pegged the issue at 781/4.

In the Bloomberg article, "a person with knowledge of the matter" reportedly said that the Japanese bank would report a loss of $1.4 billion next month when its earnings are released.

The source also said that Shinsei is expected to scrap its merger with Aozora Bank Ltd.

The merger was announced last July and if successful, would create Japan's sixth-largest lender with assets of $180 billion and a combined market value of $5.2 billion.

However, it was reported in January that some issues had come up during negotiations, resulting in doubts that the merger would be completed.

Elsewhere in the financial space, Ambac Financial Group Inc.'s 6.15% notes due 2087 were called "weaker" at 8¾ bid, 9 offered.

First Data boosted by Intel

First Data saw its bonds gaining some ground in the wake of what one trader called "spectacular numbers" from Intel Corp.

"It kind of pulls the whole industry up," he explained.

The trader said about $20 million of First Data's 10.55% notes due 2015 traded "up a couple points" at 89 bid, 90 offered.

Another trader placed the 11¼% notes due 2016 around the 83 level, up a deuce.

And, another market source quoted the 11¼% notes at 84 bid, 85 offered.

First Data is an Atlanta-based processor of electronic payments.

Visteon trending higher

A trader said that Visteon paper "keeps going higher," placing the 7% notes due 2014 around 101.

"I don't know what the clause is in those bonds, but it seems like they are running out of room," he speculated.

Another trader, however, said the notes were "not that much changed" at par ½ bid, 101 offered.

In a document filed Tuesday with the bankruptcy courts, Visteon said it was "seriously exploring" a toggle plan that would help the company avoid litigation and would also remove uncertainty regarding a its rights-offering based plan.

Visteon is a Van Buren Township, Mich.-based automotive parts supplier.

GGP up on Simon bid

General Growth Properties' debt ended somewhat higher after word hit the market that Simon Property Group had made yet another investment bid for the bankrupt Chicago-based shopping mall operator.

A trader called the bonds up a point, seeing the 5 3/8% notes due 2013 at 107½ and the 7.20% notes due 2012 at 1143/4.

Simon Property sent a letter to GGP's chief executive, Adam Metz, on Wednesday, in which it said it would be willing to match the $2.5 billion proposal led by Brookfield Asset Management. However, Simon said that its proposal was superior, as it "would eliminate the highly dilutive warrants that GGP proposes to issue to Brookfield, Pershing Square and Fairholme Capital," Simon said in a press release.

The proposal from Simon also includes a $1 billion co-investment commitment by Paulson & Co.

In a brief press release, GGP said it would "the proposal consistent with its fiduciary duties." GGP has already once rejected a Simon takeover bid.

Distressed market firms

Also in distressed territory, Harrah's Entertainment Inc.'s 10% notes due 2018 continued to improve, closing around 87 5/8, a trader said.

Dynegy Inc.'s 7½% notes due 2015 meantime gained nearly a point to end at 87½ bid, 88 offered.

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