TXU new issue 'stuck' around par, other issues unchanged; NewPage notes pressured by CFO exit

By Stephanie N. Rotondo

Portland, Ore., April 15 - The distressed debt market finished off the week about unchanged, as looming holidays - Passover this weekend and Easter the next - took players away from their desks.

"I expect lots of absentees during the [coming] week," a trader said.

Another trader said new issues were taking "some of the focus," but that there was little interest falling to the distressed realm.

Energy Future Holdings Corp.'s new issue - which priced Thursday - was trading north of par, though one trader said the notes were "stuck" there. The rest of the complex was about unchanged.

Energy Future had launched the offering in connection with a recently secured amend-and-extend agreement.

Meanwhile, news of yet another executive departure weighed on NewPage Corp.'s debt. The exit brings the tally up to four lost executives within the last year.

TXU holds its ground

Energy Future Holdings' new issue of 11½% notes due 2020 was "stuck around" par 5/8 bid, par 7/8 offered, a trader said.

Another trader placed the issue at par 5/8 bid, par ¾ offered, "pretty much where it was trading all day."

The rest of Energy Future's complex was "not much changed," the first trader said, seeing the 10¼% notes due 2015 falling half a point to around 66, the 10% notes due 2020 slipping to 106¼ bid, 106 3/8 offered, the 10 7/8% notes due 2017 around 90 and the 6.55% notes due 2034 around 521/2.

The latter two notes he deemed unchanged.

The second trader meantime saw the 10¼% notes around 66, "probably about unchanged."

The Dallas-based energy producer priced the new $1.75 billion issue on Thursday. The offering was a condition of an amend-and-extend agreement the company recently secured from its credit facility lenders. Proceeds from the sale will be used to pay the lenders higher interest rates, as well as fees associated with securing the extension.

Standard & Poor's rated the new issue at CCC.

Energy Future, or TXU, was prompted to secure the amend and extend from lenders holding about $17.77 billion of debt after Aurelius Capital Management alleged that some inter-company loans made by TXU to its subsidiaries alleged a technical default.

As part of its effort, TXU also asked lenders to agree that it had not breached covenants on its credit facilities.

NewPage dips on CFO exit

NewPage's subordinated debt took a hit on news the company's chief financial officer had resigned.

A trader said the 10% notes due 2012 were "getting whacked," falling from levels around 62 to 60½ bid, 61 offered.

Another source quoted the debt at 60 bid, 61 offered, down a deuce. The 11 3/8% notes due 2014 were unchanged at par bid, 101 offered.

The Miamisburg, Ohio-based coated papermaker said Friday that David Prystash had chosen to leave the company to pursue other opportunities. The exit marks the fourth executive departure in less than a year.

Curtis Short, controller and chief accounting officer, has been named the interim CFO, effective May 11.

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