NewPage debt off post-numbers; Smurfit loses ground; GM unchanged, 'volatile'; Harrah's lower

By Stephanie N. Rotondo

Portland, Ore., May 7 - Distressed debt remained weaker during Friday trading, according to traders.

But one trader noted that it was "kind of a mixed bag as far as where prices went." He explained that while some things opened higher, others started off lower - but on either side, once the day really got going, they reversed directions.

The trader also noted that there was "more volume than I would have expected."

NewPage Corp. saw its bonds losing more ground, following the release of the company's quarterly results late Thursday. Sources estimated the debt lost about a point on the day.

In the same sector, Smurfit-Stone Container Corp.'s notes remained active and, like the rest of the market, under pressure. The company's debt traded into the low-90s, versus levels around par on Monday.

General Motors Corp. was a "volatile" name, according to a trader. But the carmaker's paper managed to end nearly unchanged by the end of the day.

And, Harrah's Entertainment Inc.'s always-active bonds continued to see sizable trading. Following the general market trend, the bonds were seen adding to their losses.

NewPage debt off post-numbers

NewPage debt lost "another point," a trader said, just one day after the Miamisburg, Ohio-based coated papermaker released its first-quarter results.

The trader pegged the 11 3/8% notes due 2014 around 961/2.

Another trader saw the 11 3/8% notes closing at 95 bid, 96 offered, down from levels around 98½ early on in the session.

At another desk, the 10% notes due 2012 were seen at 58 bid, 60 offered, down from levels in the mid-60s on Thursday.

"That's a good wallop," the trader said.

The trader also saw the 11 3/8% notes at 96 bid, 97 offered, though he added that the bonds had hit a low around 951/2.

Late Thursday, NewPage released its earnings, which showed a 13% increase year-over-year in net sales. Sales came to $817 for the first quarter of 2010, versus $722 million the year before.

Net loss, however, widened to $175 million, compared with $109 million in 2009.

"During the first quarter of 2010, we saw a significant rebound in sales volumes as customer demand increased and advertising began to recover," said Tom Curley, president and chief executive officer, in the earnings release. "The industry experienced a 19% increase in coated paper sales volumes in the first quarter of 2010 compared to the first quarter last year.

"At NewPage, our coated paper sales volume increased 27% for the first quarter of 2010, and we gained market share," he added. "Our total sales volumes were up 31% compared to the first quarter of 2009, largely driven by improved coated paper demand. We believe improved sales demand indicates that our industry is prepared for significantly improved results for the remainder of 2010."

NewPage also saw its liquidity improve to $247 million at the end of the quarter, up from $224 million at the end of 2009. The company had $13 million in cash by the end of the period and proposed asset sales had potential to generate another $150 million.

Smurfit losing ground

Also in the paper products arena, Smurfit-Stone Container bonds were still seeing "decent trading," according to a trader.

The trader estimated that $25 million to $30 million of the 8% notes due 2017 and the 8¼% notes due 2012 changed hands at 90 bid, 91 offered. He noted that on Tuesday, the bonds had been much higher at 97 bid, 99 offered.

Another trader called the debt a point weaker, also around the 91 mark. But another said the 8¼% notes were only off by a quarter of a point at 911/4.

GM notes 'volatile'

General Motors' benchmark bonds "started lower and worked its way higher," a trader said.

The trader pegged the 8 3/8% notes due 2033 somewhere between its daily low of 30½ and a high of 33. He added that "a couple $100 million" of the paper turned over.

The trader also said that GM bonds typified the day's trend: Bonds would either start out on the high or low side and then spend the rest of the trading day going in the other direction.

Another trader called GM "volatile," though he didn't see much in the way of price movement, placing the notes at 32 bid, 32½ offered.

General Motors is a Detroit-based automaker.

Harrah's still active, lower

Harrah's Entertainment's notes continued to see "a lot of volume," a market source said.

The source noted that trading in the name was spread out over "assorted issues," but that the 11¼% notes due 2017, the 10¾% notes due 2016 and the 10% notes due 2018 made up the bulk of the activity, totally "well over $100 million" when combined.

The 11¼% notes closed at 102¾ bid, 103¾ offered; the 10¾% notes at 80½ bid, 81½ offered; and the 10% notes at 80 bid, 82 offered.

At another shop, the 10% notes were deemed down "another point" around 793/4.

Harrah's Entertainment is a Las Vegas-based casino operator.

Broad market remains soft

In the broader marketplace, distressed credits continued to be weak, traders reported.

One trader saw CIT Group Inc.'s 7% notes due 2017 hitting a low around 88 before they came back some to close at 89 bid, 89½ offered. He remarked that the paper had lost 6 to 7 points over the course of the week.

American General Finance Corp., another financial name, was also under pressure, the trader said. The 6.90% notes due 2017 dipped to 75 before "rebounding a couple of points" to close around 77.

In the retail arena, Blockbuster Inc.'s 9% notes due 2012 were "a little lower" around 18 bid, 19 offered, a trader said, though he noted that there "wasn't any real trading."

Blockbuster's 11¾% notes due 2014 meantime ended at 66 bid, 67 offered.

And Clear Channel Communications Inc.'s 11% notes due 2016 declined "almost 3 points," a trader said, to around 70.

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