Distressed bonds firm on good volume; NewPage benefits from market; Blockbuster, Harrah's gain

By Stephanie N. Rotondo

Portland, Ore., Sept. 10 - It was "another good day," a trader said of the distressed bond market on Friday.

"Lots of bond trading," he said. "Everything was up a solid half point, that's for sure."

"Part of what is happening," he continued, "is the more generic stuff has taken a backseat." That is allowing other credits to come in to fill the void, which benefits them as their prices increase.

"There was more volume than I would have expected, especially with no new issue," the trader added.

The ever-active NewPage Corp. inched up, albeit slightly so, as the bonds fluctuated with the market. Still, the company troubles are continuing, as a Canadian province looks to reject a power plant proposal between the papermaker and a local power producer.

Consumer-driven credits like Blockbuster Inc. and Harrah's Entertainment Inc. were also boosted by the overall positive tone of the marketplace.

NewPage fluctuates with market

NewPage bonds "managed to trade up a little bit," according to a trader.

He said about $10 million to $20 million of the 11 3/8% notes due 2014 turned over at 89 5/8.

Another trader, however, said the bonds were "about unchanged," quoting them at 88½ bid, 89½ offered.

NewPage's financial troubles might cause yet another hiccup for the company as it attempts to partner with Nova Scotia Power for what the Chronicle Herald calls a "controversial $208 million power-generating plant."

The plant would burn wood waste to generate electricity.

However, NewPage's financial constraints have come to the attention of the Canadian province's utility regulatory board and a consultant has already recommended rejecting the proposal.

Blockbuster, Harrah's head higher

The firmer market helped Blockbuster's 9% notes due 2012 gain some ground, a trader said.

The trader pegged the notes at 7 bid, 8 offered, though he said the 11¾% notes due 2014 were "still" in the 52 bid, 53 offered context.

Another trader said he saw little trading going on in the credit - "I wish it would go away," he quipped - but he did see "6 bids without for small pieces." He added that the 11¾% notes were "bracketing 52."

In another consumer-driven name, Harrah's Entertainment's 10% notes due 2018 moved up to 793/4, on $20 million to $30 million traded, a trader said.

At another desk, the 10% notes were placed at 79 bid, 80 offered and the 10¾% notes due 2016 were seen at 793/4.

Broad market mostly better

In the broader market, ATP Oil & Gas Corp.'s 11 7/8% notes due 2015 finished the day "up a couple more points," according to a trader, at 82 bid, 82½ offered.

Tronox Worldwide LLC's 9½% notes due 2012 were meantime unchanged at 91¼ bid, 92½ offered.

In the autosphere, General Motors Corp.'s 8 3/8% notes due 2033 dipped slightly to 31 5/8 bid, 32 1/8 offered.

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