ATP higher on loan news; Anadarko dominates, bonds fall; Clear Channel moves up; NewPage dips

By Stephanie N. Rotondo

Portland, Ore., June 25 - Distressed debt closed out Friday's session about unchanged, traders reported.

The day was likely overshadowed by Congress' approval of legislation that would impose new regulations on Wall Street.

And, according to Standard & Poor's, the distressed debt ratio gained for the second month in a row, reading at 12.3%.

Still, ATP Oil & Gas Corp. had some good news out, which helped its bonds head upward, splitting off from the rest of the oil and gas sector. The company announced Thursday that it had secured a new term loan and that gave the bonds a boost come Friday.

The rest of the oil arena, however, ended the trading day weaker, as concerns about the cost of the Gulf of Mexico oil spill cleanup grew. Anadarko Petroleum Corp., though considered the day's most active credit, was softer given current sentiment.

Clear Channel Communications Inc. regained some of its losses incurred in Thursday's session. There was no reason for the reversal, which had come after the company announced the resignation of its top executive.

Meanwhile, NewPage Corp. closed on the lighter side. According to reports, the company recently announced layoffs that would reduce its work force by 10%.

ATP gets boosts on loan news

ATP Oil & Gas' debt moved up 1 to 2 points on news of the company's recent bank deal.

A trader said the 11 7/8% notes due 2015 were "a little better than yesterday," though on "not a whole lot of action," at 74 bid, 77 offered. Another source placed the paper around 75.

In a filing with the Securities and Exchange Commission on Thursday, the Houston-based oil producer said it had secured a new $150 million term loan with Credit Suisse. The loan was priced at 11% and carries call protection of 104 in year one, 103 in year two and 102 in year three.

There is also a $350 million accordion feature.

The company intends to use the facility to retire an existing $100 million revolver.

Anadarko dominates, bonds fall

Also in the oil arena, Anadarko Petroleum was again dominating the marketplace, according to traders.

"It's all Anadarko," a trader said.

The company's bonds were down about a point, he said, seeing the 5.95% notes due 2016 at 86¼ and the 6.45% notes due 2036 at 80 3/8.

Another market source pegged the 5.95% notes at 85½ bid, 86½ offered, down from 86 bid, 87 offered previously.

It is still unclear whether Anadarko will be on the hook for any liabilities stemming from the April 20 explosion at the Deepwater Horizon rig in the Gulf of Mexico, in which it owns a 25% stake. Still, as cleanup and compensation costs escalate - operator BP plc has thus far paid out $2.35 billion - the market seems to be pressuring the credit and the oil sector in general.

Clear Channel moves up

A trader said Clear Channel Communications' 5¾% notes due 2014 were "kind of active" and about a point better.

The trader placed the notes around 771/2. At another desk, the paper was quoted at 77 bid, 78 offered, while the 10¾% notes due 2016 were deemed unchanged around 73.

Earlier in the week, the San Antonio-based multimedia company announced that Mark P. Mays, its president and chief executive officer, had resigned his post.

"After 21 wonderful years of building the industry leader that is Clear Channel, I have made a personal decision to step away from the chief executive role," Mays said in a press release. "Clear Channel is well-positioned to continue leading in the marketplace, and given the positive trends I am seeing, I am very optimistic about the future of the company."

Mays will stay on until a replacement is named and will also continue his role as chairman.

NewPage bonds decline

Miamisburg, Ohio-based NewPage saw its bonds slipping about a point on the day, according to market sources.

One source said the 11 3/8% notes due 2014 were "pretty active," falling to levels around 911/2. That level was echoed at another desk.

Another source quoted the bonds at 91½ bid, 92, versus 92 bid, 93 offered previously.

According to the Mineral Daily News Tribune in Keyser, W.V., NewPage is reducing its workforce at its Luke, Md. Paper mill by about 10%. The layoffs are part of NewPage's "Return to Sustainable Profitability" initiative, the article said.

The layoffs will be announced by Aug. 2 and will affect both salaried and hourly workers. Most of the layoffs will go into effect before the end of the year.

Broad market steady to softer

Elsewhere is the distressed space, Blockbuster Inc.'s 9% notes due 2012 remained quiet and unchanged, just one day after the company held its annual meeting.

A trader quoted the notes at 9½ bid, 10 offered.

Smurfit-Stone Container Corp. meantime "continued to be weak," the trader said, seeing the bonds trade down to around 82.

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