Sprint seeks to dump Clearwire, bonds decline; Clear Channel up with market; ATP rallies

By Stephanie N. Rotondo

Portland, Ore., Oct. 7 - The distressed debt market was mostly firm on Friday, though a trader said it was "kind of swooning" towards the end.

A topical mover of the day, however, was not a climbing credit but a falling one. Clearwire Corp. bonds got smashed after majority stockholder Sprint Nextel Corp. held an investors day, during which the company "said a number of things that were negative for Clearwire," a trader said.

Sprint debt ended mixed.

Meanwhile, Clear Channel Communications Inc. paper was trending higher, though on no fresh news.

Also continuing to trend higher - after getting beat down earlier in the week - were ATP Oil & Gas Corp.'s bonds.

Sprint to dump Clearwire

A trader said that Clearwire paper dropped considerably after Sprint Nextel executives made comments that were not viewed to be in Clearwire's favor.

Sprint holds a majority interest in the Kirkland, Wash.-based wireless network provider.

The trader said the 12% first-lien notes due 2015 fell to levels below 70, before settling in around the 70 mark. The 12% second-lien notes due 2017 declined to levels in the mid-30s.

For its part, Sprint bonds did not fare so well either.

One trader said the 8 3/8% notes due 2017 were up 1½ points, ending around 941/2.

But at another desk, the 8¾% notes due 2032 were seen falling 2 to 3 points to levels around 84.

"They are up a lot from their lows," a trader conceded regarding Sprint's debt. "It was sideways most of the day."

He noted that both Clearwire and Sprint saw their stock slipping in Friday trading.

Sprint's equity (NYSE: S) fell 60 cents, or 19.77%, to $2.42 per share, while Clearwire's stock (Nasdaq: CLWR) lost 65 cents, or 31.71%, to $1.40.

At an investor meeting in New York on Friday, Sprint's executives said that it would discontinue selling phones and devices compatible with Clearwire's WiMax network by the end of 2012. The company intends to move customers to its own 4G network that uses LTE technology.

The announcement came just days after it was confirmed that Sprint would soon be offering Apple Inc.'s coveted iPhone.

Clearwire has been struggling of late and just last month Sprint was reportedly in talks with cable companies to secure an investment that would then allow Sprint to buy up the remaining equity of Clearwire that it doesn't already own.

Clear Channel gains steam

There was no fresh news out on Clear Channel Communications on Friday, but as "a lot of stuff was up a couple points" during the session, Clear Channel reaped the benefits.

A trader called the 9% notes due 2021 up a deuce at 82. Another trader quoted the issue at 81 bid, 82 offered, "up a couple points."

The second trader also saw the 10 ¾% notes due 2017 "a bit better" at 57 bid, 58 offered, compared to 55 bid, 56 offered previously.

Clear Channel is a San Antonio-based multimedia company.

ATP rally rolls on

After spending the beginning of the week tanking, ATP Oil & Gas' 11 7/8% notes due 2015 have rebounded nicely.

The rally continued into Friday's session and a trader called the notes "up almost 4 points" around 73.

The Houston-based oil exploration company saw its bonds start to get hammered out of the gate on Monday, as investors reacted negatively to a report that Moody's Investors Service put out on Sept. 23. The report alleged that there was a "high likelihood" that the company would have to restructure ahead of its 2015 debt obligations because it did not have the free cash flow to redeem the debt.

However, the company - which holds 66% of reserves in the Golf of Mexico - has said that its recent production schedule should be enough to generate positive cash flow in the near term, positioning itself to be able to handle the payment when it arrives.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.