NewPage debt active, firmer; OPTI Canada subs rally back; Rite Aid, DirectBuy both gain ground

By Stephanie N. Rotondo

Portland, Ore., May 6 - Distressed debt ended the week with a positive tone, traders reported Friday. However, many continued to lament the lack of supply in the space, which results in thin volume.

"Distressed is all very slow right now," a trader said. "Even more so today because it's Friday."

NewPage Corp. was an active one, though there was no news out to act as catalyst. Still, traders saw the bonds inching upward on the day.

OPTI Canada Inc. was also slightly better, after losing ground in the previous session. There was no news out on OPTI either, but traders did speculate that the rally was tied to the fluctuating price of oil.

Meanwhile, Rite Aid Corp. and DirectBuy Holdings Inc. both finished on a high note for the week. The gains were deemed due to the general tone of the market and not on any specific news.

NewPage active, better

NewPage's 10% notes due 2012 were deemed "pretty active" by a trader, though there was no fresh news out on the Miamisburg, Ohio-based coated papermaker.

He said the notes were trending "a little bit better" at "plus/minus 58."

Another trader said about $50 million of the bonds changed hands, calling them a point better around 591/4.

OPTI subs rally

OPTI Canada's subordinated debt popped back up after losing steam late in Thursday's trading session.

One trader said the bonds - the 7 7/8% and 8¼% notes due 2014 - were better in the wake of higher oil prices, quoting the notes at 52¼ bid, 52½ offered.

However, by the end of the day, oil closed down $2.03 to end at $97.77, after trading near neutral for most of the day.

At another shop, a trader echoed that 52¼ bid, 52½ offered market, also calling the debt "a little bit better."

However, a third trader said the paper was "basically in line" with Thursday's close at 51 bid, 52 offered.

Rumor has it that New Delhi, India-based energy explorer Oil and Natural Gas Corp. is in talks to partner with a Canadian oilsands producer. Though it is considered a long shot, Calgary, Alta.-based OPTI is one name that is being thrown around.

Rite Aid, DirectBuy gain

In the retail space, Rite Aid's debt was called "better, especially the shorter stuff" by a trader.

He said the 8 5/8% and 9 3/8% notes due 2015 were firmer at 94 bid, 94½ offered.

Another market source saw the 8 5/8% notes gaining half a point to close at 93¾ bid.

The trader also saw DirectBuy Holdings' 12% notes due 2017 moving "a little higher" to 55 bid, 56 offered.

There was no news out on either company.

Capmark up, Lehman steady

In the financial realm, Capmark Financial Group Inc.'s bonds - such as the 7 7/8% notes due 2012 - were seen gaining a quarter- to a half-point, ending at 56¾ bid, 56 5/8 offered, according to a trader.

The trader also said that Lehman Brothers Holdings Inc.'s debt was "a little bit active, but unchanged," seeing the 5 5/8% notes due 2013 at 253/4.

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