Clear Channel steady ahead of new issue pricing; Nebraska Book unchanged after quarterly call

By Stephanie N. Rotondo

Portland, Ore., Feb. 15 - Tuesday's distressed debt market was "pretty stagnant," according to a trader.

"There is still cash coming, but the calendar has slowed down," he said, speculating that with the market being at its highs, many accounts were "taking a breather."

At any rate, the market was mostly unchanged, with a few exceptions here and there, he said.

Clear Channel Communications Inc. was steady ahead of pricing on the company's new issue. Nebraska Book Co. Inc. was also largely unchanged, even after the company held its quarterly conference call. Management was optimistic going forward and noted that macro trends for the industry remained strong.

Meanwhile, Alcatel Lucent USA Inc. continued to gain ground. The rarely traded bonds have been on an upward climb for the last couple of sessions.

Clear Channel bonds unmoved

Clear Channel Communications' debt was holding its ground as the market waited for the company's new $750 million issue of priority guarantee notes due 2021 to price.

A market source quoted the 5½% notes due 2014 at 91½ bid, 92 ½ offered, the 11% notes due 2016 at 96½ bid, 97½ offered and the 10¾% notes due 2016 at 97½ bid, 98½ offered.

Another source pegged the 10¾% notes around 971/2, calling that "pretty much unchanged, maybe off a quarter."

Books on the new 10-year notes were slated to close at 11 a.m. ET on Tuesday, with pricing to come thereafter. Pricing finally came well after the bell rung and the deal - priced at par to yield 9% - was upsized to $1 billion.

The San Antonio, Texas-based multimedia company will use proceeds from the private placement offering to repay bank debt and to partially refinance its 6¼% notes due 2011.

Nebraska Book steady

A source deemed Nebraska Book Co.'s bonds unchanged to "a little bit better" after the company's parent, NBC Acquisition Corp., held its quarterly conference call.

The source placed the 8 5/8% notes due 2012 at 90 bid, 91 offered and the 11% notes due 2013 at a wide 48 bid, 52 offered.

At another desk, the 8 5/8% notes were seen at 90 bid, 90½ offered, about unchanged.

The Lincoln, Neb.-based textbook seller filed its quarterly report with the Securities and Exchange Commission on Monday. For the third quarter ending Dec. 31, parent NBC saw revenues of $69.23 million, up from $66.67 million for the same quarter of 2009. Gross profit slipped slightly to $27.56 million from $28.06 million, but "gross margins remain solid at nearly 40%," said Alan G. Siemek, chief financial officer.

EBITDA was negative $1.92 million for the quarter, compared with positive $83,581 the year before. However, management noted that it was typical for EBITDA to dip during the third quarter.

"Our fiscal third quarter is typically the quarter with the lowest revenues and EBITDA performance in our year," Oppegard said, as sales activity is usually less than in back-to-school quarters.

Net loss was slightly wider at $16.29 million, versus $15.55 million in 2009.

At the subsidiary level, net loss was $13.63 million, down from $14.89 million the previous year.

During the call, management focused heavily on its recently launched textbook rental program, an initiative aimed at gaining more market share. The company was optimistic that 2012 would see an increase in EBITDA.

In Monday's filing, Nebraska Book also said it was seeking to refinancing its $75 million ABL credit facility. The company said that in order to do such a transaction, it will likely have to refinance its senior secured notes and senior subordinated notes, as well as the senior discount notes linked to NBC. Management said talks were under way, but did not give further details.

Alcatel gains continue

Alcatel Lucent USA's bonds "have been up," a trader said of the rarely traded credit.

The bonds were starting to firm Monday, as investors responded to good numbers put out late Friday.

The trader saw the 6.45% notes due 2029 inching up to end around 87. Another source also saw the paper at that level.

Tousa ruling pressures debt

Tousa Inc.'s 9% notes due 2012 were "definitely down from before the ruling," a market source said, referring to the recent news regarding the company's fraudulent transfer case.

The source said the paper was being quoted wide at 10 bid, 30 offered. As previously reported, a trader said the debt had dropped from the 50s into the teens on the back of the news.

On Friday, a district court overturned the bankruptcy court's ruling, allowing senior lenders to keep the over $450 million received for debt payments related to Tousa's Transeastern joint venture.

Tousa, a Hollywood, Fla.-based bankrupt homebuilder, is in process of liquidating.

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