Trico firms, bankruptcy still possible; NewPage pushes ever higher; GM trades actively, lower

By Stephanie N. Rotondo

Portland, Ore., Aug. 24 - A declining stock market, coupled with poor housing data for July, helped to create a "weaker tone, in general" for the distressed debt market, a trader said.

Still, he added that it "didn't seem like a lot of stuff was getting whacked" and that volume remained light.

Trico Marine Services Inc., however, bucked the trend, as its bonds ended stronger than the previous session. But one market source noted that there are still concerns about the company's ability to continue.

NewPage Corp. also closed on a positive note. The performance marked the second day of modest gains for the papermaker, though there remained a lack of news.

On the declining side were General Motors Corp. and Clear Channel Communications Inc. Traders said GM was one of the day's most active names, while Clear Channel was simply softer with the market.

Trico firms, bankruptcy possible

Trico Marine bonds beat the day's generally weaker trend, ending up " a point or two" on the day, according to a trader.

The trader quoted the 8 1/8% notes due 2013 at 16 bid, 18 offered. He added that he saw the 11 7 /8% notes due 2014 offered at 88.

"I think it's more like 85 [bid], 87 [offered]," he said.

Another trader said the credit was "reasonably active," seeing the 8 1/8% notes at 17¾ bid, 18¾ offered.

The second trader also said the 11 7/8% notes were at 85 bid, 86 offered, while the 3% convertible notes due 2027 were at 7 bid, 8 offered.

But while the notes were better on the day, the second trader was quick to point out that troubles remain for the Woodlands, Texas-based provider of subsea, trenching and marine support vessels and services.

They're likely to file for bankruptcy soon, according to the trader.

"They are not making any money and no one wants to do business with them because they know that," he said.

While he admitted that he had not researched the matter fully, he opined that the "converts [are not] covered at all" in the event of a bankruptcy, though he added that the 11 7/8% notes were "reasonably well covered."

He predicted a Chapter 11 filing would be seen within a month and that it wouldn't be outside of the realm of reason for the company to choose the pre-pack route.

Earlier this month, Trico Marine warned of a potential filing should restructuring talks fall apart. The company also said that its second-quarter results could potentially result in a breach of covenants.

"The company may also be required to undertake bankruptcy proceedings as a result of its inability to meet its past, current and future commitments," Trico said in a statement.

NewPage pushes ever higher

Like Trico Marine, NewPage notes "traded up all day," a trader told Prospect News.

The gains were modest - about a point - putting the 11 3/8% notes due 2014 around the 81¾ bid, 82 offered level, the trader said.

The trader also deemed the 10% notes due 2012 a "teeny bit better" at 33 bid, 33 1/8 offered.

Another trader pegged the 11 3/8% notes around 82, which compared with 80½ bid, 80 ¾ offered on Monday.

And, yet another trader said the bonds inched up three-quarters of a point to 813/4.

Tuesday's gain marked the second straight day of consecutive improvement for the Miamisburg, Ohio-based papermaker's debt. That compared with a nearly weeklong losing streak last week.

GM trades actively, lower

In an otherwise subdued marketplace, General Motors benchmark 8 3/8% notes due 2033 were "one of the more active ones" during Tuesday trading, a trader said.

Still, he said the bonds lost some ground, closing around 321/2.

Another trader said a "boatload" of the 8 3/8% notes changed hands - about $75 million to $100 million, he estimated. The trader also called the debt softer around the 32½ level.

There was no news out on the Detroit-based carmaker.

Market pressures Clear Channel

Clear Channel Communications' debt was "probably down half a point" on "general market weakness," according to a market source.

The source placed the 10¾% notes due 2016 at 75 bid, 75½ offered.

At another desk, a trader also saw the 10¾% notes around the 75½ level. He also saw the 11% notes due 2016 around 741/2.

Clear Channel is a San Antonio-based multimedia company.

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