Distressed debt strong for second day; upbeat market lifts Rite Aid; Clear Channel gives back

By Stephanie N. Rotondo

Portland, Ore., Feb. 8 - The broad market firmed for the second straight session on Tuesday, helping most distressed issues gain ground.

However, there were "not a lot of news-driven situations," a source said.

In fact, the better tone of the marketplace was cited as reason for gains in Rite Aid Corp. debt. The bonds moved up at least a point on the day, with no news out to act as a catalyst.

But while most of the market headed higher, Clear Channel Communications Inc.'s bonds came in a little. The company announced earnings on Monday and, prior to the release, the bonds had been steadily climbing up.

Hawker Beechcraft Acquisition Co. ended the day stronger, though trading was thin. Still, the paper experienced a 2- to 3-point pop, even without any news out.

A source said Thursday would be a telling day for OPTI Canada Inc., as the company will announce its quarterly results. The debt was quiet during Tuesday's session, especially when compared with the active gyrations seen last week after the company said it had hired a financial adviser.

Rite Aid gets lift from market

A market source said Rite Aid paper was "a little better," speculating that the debt "traded [up] with the market."

Another trader said the bonds were on the active side, seeing the 9½% notes due 2017 up almost 1½ points at 89 and the 9 3/8% notes due 2015 at 911/2.

"They look up 1 to 1½ points across the board," he said.

At another desk, a source deemed the 8 5/8% notes due 2015 about 2 points better at 92 bid.

There was no news out on the Camp Hill, Pa.-based drugstore chain.

Clear Channel gives back

Clear Channel remained busy just a day after releasing earnings and announcing a new issue.

But one trader saw the bonds drifting in about half a point, bringing an end to the credit's recent steady climb up.

The trader placed the 5½% notes due 2014 around 92 and the 11% notes due 2016 around 98 7/8.

Another trader said the 5½% notes slipped to 92 bid, 92½ offered, versus 92 bid, 93 offered previously. The 11% notes were unchanged at 98½ bid, 99½ offered.

The San Antonio-based multimedia company's parent organization, CC Media Holdings Inc., released its fourth-quarter and full-year results on Monday. For the year, the company posted a 6% increase in revenues, which came to $5.97 billion. Net loss was $623 million, versus a loss of $4.54 billion in 2009.

For the last quarter of 2010, the company saw revenues gain by 8% to $1.63 billion. Net loss was $86 million compared with $268 million for the same quarter of 2009.

Clear Channel also announced that it was planning a private placement of $750 million of priority guarantee notes due 2021. The proceeds from the offering will be used to repay outstanding debt.

In order to conduct the offering, Clear Channel also said it was attempting to amend its credit facilities to extend maturities and to allow for the issuance of new debt.

Hawker flies higher

There was no news out to explain the gain, but Hawker Beechcraft Acquisition's debt moved up by 2 to 3 points, according to traders.

One source saw the 8½% notes due 2015 closing at 77 bid, 78 offered, up from the last round-lot trade between 74 and 75. The 8 7/8% notes due 2015 were quoted at 77 bid, 78 offered.

Another source called the 8½% notes 3 points better at 77½ bid.

Hawker is a Wichita, Kan.-based aircraft manufacturer.

OPTI quiet pre-earnings

Trading in OPTI Canada bonds was "pretty quiet," a market source said, as the market readies for the company's earnings report on Thursday.

"That is what will move it," the source said of the pending results.

He saw the 7 7/8% and 8¼% notes due 2014 at 53¼ bid, 54¼ offered, "I'd say unchanged."

Another trader, however, called the notes almost a point weaker, trading around 523/4.

OPTI Canada is a Calgary, Alta.-based oilsands producer.

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