Ahern Rentals climb; GM steady after Tuesday gains; AIG bonds busy on asset-sale buzz

By Paul Deckelman

New York, Jan. 5 - Ahern Rentals Inc.'s bonds were seen as the big gainers on Wednesday in the distressed-debt precincts, although there was no word on what was pushing the equipment-rental company's paper up by as much as 3 or 4 points in the absence of any concrete news.

There was news out on American International Group Inc., whose bonds, and the bonds of such AIG subsidiaries as American General Finance Corp. were seen better, in fairly active trading for a few of the issues, helped by Tuesday's regulatory disclosure that AIG had gotten offers of as much as $3 billion for its Taiwan insurance unit, which is among the assets AIG is trying to sell in order to pay down its massive debt to the federal government arising from its 2008 bailout.

Bonds of the former General Motors Corp. were seen mostly steady on Wednesday, after having notched gains on Tuesday when the top U.S. car maker reported better December and full-year sales versus year-earlier levels.

Despite an impressive surge in the company's stock, bonds of phone directory publisher Dex One Corp. were seen not much changed on Wednesday. Traders said there was no news out to explain the movements in the company's securities.

There was little or no activity seen in the bank debt of companies considered distressed.

Ahern Rentals up on no news

A trader said that Ahern Rentals was "definitely" up 3 points on the day to bid levels around 531/2-54.

He said there was "not that much trading" going on in the bonds of the Las Vegas-based equipment-rental company - whose finances have been hit hard by the problems in the homebuilding and other construction industries - with "just a couple of trades. Nevertheless, it was a decent move - it wasn't really active, but it's up.

He saw no real news out on the company that would explain its gains.

A second trader also saw those bonds up 3 or 4 points on Wednesday, quoting them at 55 bid.

Previously, they had been in the low-50s, he said, "and had been around 50 for a long time."

"I don't know what's going on, but maybe somebody's sharpening the pencil on 'em."

Autos spin wheels after gains

In the autosphere, a trader said that Motors Liquidation Co.'s benchmark 8 3/8% bonds due 2033 - which had firmed solidly in Tuesday's dealings after affiliated carmaker General Motors reported strong year-over-year sales gains for December and for all of 2010 - were trading around 36 bid, 37½ offered, which he called unchanged on "not a lot of activity."

A second trader said that while the bonds issued by the former GM "were definitely up [Tuesday] on the higher sales figures, they were unchanged on Wednesday in a 35 to 36 zone, "all of them."

He meantime saw Ford Motor Co.'s bonds, which had also firmed on Tuesday on better sales numbers for the Number-Two domestic car maker, also unchanged, with its 7% notes due 2015 at 108 bid.

Yet another trader saw Ford's 7.45% bonds due 2031 unchanged at 107½ bid, 108½ offered, while seeing the GM long bonds at 36½ bid, 37½ offered, likewise steady.

AIG active on sale revelations

Among financial issues, traders saw some activity in the bonds of troubled insurance giant American International Group Inc., which got a boost, presumably, from the disclosure that AIG has received expressions of interest from several potential buyers looking to purchase its Taiwanese insurance subsidiary.

One trader noted that the New York-based insurer's 6.40% notes due 2020 was trading at 104 bid, which he called down ½ point on the day - but he noted that AIG paper had risen solidly on Tuesday.

He saw AIG's International Lease Finance Corp. 8 7/8% notes due 2017 at 110½ bid, which he said was up 1¼ points versus Tuesday, although he said that they "weren't that active." He said that the most active AIG paper were the parent company's 6.40s and 5.45% notes due 2017, which gained 1/8 point to 101¾ bid.

AIG unit American General Finance Corp.'s 6.90% notes due 2017 were little changed at 841/2. Over $15 million of those bonds changed hands, mostly in round lots.

The trader also saw American General's 5.40% notes due 2015 up almost 1 point at 83¼ bid, while its 5.85% notes due 2013 were "very active" at 94 bid, although it was only up ¼ point.

But he said that "for the most part, the paper was unchanged to up 1/8 or 1/4," while reiterating that most AIG issues had risen 1 point or more on Tuesday, when the Securities and Exchange Commission released the contents of a mid-November letter from AIG, indicating was offered as much as $3 billion for its Taiwan- based unit Nan Shan Life Insurance Co.

AIG is in the process of shopping that company, and other assets considered non-core, planning on using the proceeds to help whittle down its huge debt to Uncle Sam, who pumped in billions of dollars of bailout money during the 2008-2009 financial crisis, on the assumption that a collapse of the big insurer would have had disastrous effects upon an already shaky financial industry.

Elsewhere in the financials, a trader said the various 7% bonds of CIT Group, Inc. are "all above par, so it doesn't mean much to me any more."

The New York-based commercial lender's several series of 7% notes due anywhere from 2013 to 2017, issued as part of the exit funding when it emerged from Chapter 11 in late 2009 - had been firming over the last several session on last Thursday's announcement that CIT would redeem $500 million of the 2013 notes, or a little less than a quarter of the $2.1 billion outstanding amount, at a price of 102 on Jan. 31.

He said that Lehman Brothers Holdings' various bonds were all trading around 24¼ bid, 25¼ offered. He said that was about where the failed New York-based investment banking company's bonds had already been trading.

Dex bond snoozes while stock cruises

A trader said that Dex One Corp.'s bonds were not much moved - even as shares of the Cary, N.C.-based phone directory publisher and operator of online search engines formerly known as R.H. Donnelley turned in one of the strongest performances on the day in New York Stock Exchange trading, although there was no fresh news seen out on it that might explain that stock surge.

He saw the Dex 12% notes due 2017 trading around 69 bid, 69½ offered. He said there were "some trades, but they've been bouncing around that level for the last few days," during which the bonds have moved in a 68-70 context.

There was "not a lot of trading" on Wednesday.

However, he noted that the credit "has moved up" from levels around 55-60 at the end of November and early December.

On the equity side of the fence, Dex One's NYSE-traded shares jumped as much as 13.5% on the session before going home still up 12.97%, or up an even $1, at $8.71. Volume of 1.28 million shares was twice the norm. The shares had soared some 57% during the month of December, one of the best NYSE percentage gainers on the month.

Clear Channel busy but steady

A trader said that Clear Channel Communications Inc.'s recently busy bonds have risen to a low-90s-area context, with San Antonio, Tex.-based media company's 10¾% notes due 2016 at 91½ and its 11% PIK toggle notes due 2016 at 89½ bid, unchanged.

"They've been in that range, but they are holding at the higher levels."

He saw "good volume" on both issues.

Paper parade continues

A trader said that Catalyst Paper Corp.'s bonds moved up, with the Richmond, B.C.-based paper manufacturer's 11% senior secured notes due 2016 up 1 point on the day to around 97½ bid, 98½ offered.

He saw its 7 3/8% notes due 2014 trading between 78 and 80, with "not much trades there."

Catalyst, he said, "has moved up steadily over the last couple of days."

He meantime saw Catalyst sector peer NewPage Corp.'s 11 3/8% senior secured notes due 2014 around the same 951/2-96 bid range where the Miamisburg, Ohio-based coated-paper manufacturer's bonds had already been, labeling them unchanged on the day.

OPTI Canada active

A trader said that OPTI Canada's bonds remained pretty much within their recent ranges seeing the Calgary, Alta.-based oil-sands energy company's 7 7/8% senior secured notes due 2014 staying around a 711/2-72½ range, on "some trades today, but not much."

He also saw the company's 8¼% notes due 2014 saw "a lot more activity," ending at 72¼ bid, 72¾ offered, which he called unchanged to down ½ point.

At another desk, a market source said the latter bonds were ending at 72 13/16 bid, which he called a loss of 11/16 on the session.

However, another market source, while quoting the bonds ending at 72½ bid, called that up nearly a point on a strictly round-lot basis. He noted that large-block activity in the credit was brisk, with over $27 million having changed hands by the end of the day, putting the OPTI issue onto the high yield most-actives list.

A&P mostly inactive

A trader said that he "didn't see much of" Great Atlantic & Pacific Tea Co.'s bonds during Wednesday's session.

He said that its 5 1/8% convertible notes slated to come due on June 15 and its 6¾% converts due 2012 were just "hanging around" 33 bid, 35 offered, levels which he called unchanged. Despite their convertible status, those two issues trade at low levels typical of plain old senior unsecured junk bonds because the underlying stock of the bankrupt Montrose, N.J.-based supermarket operator is considered all but worthless in a restructuring scenario.

He meantime saw the company's 11 3/8% senior secured notes due 2015 at 92 bid, 94 offered, "pretty much where I'd had them" previously. He said there was "not much" activity in either the 11 3/8s or the converts on Wednesday.

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