NewPage, OPTI still actively trading, both gain ground; Nortel moves higher; Dex One debt dips

By Stephanie N. Rotondo

Portland, Ore., May 24 - Distressed debt activity continued to center around "the same old names," a trader said Tuesday, as the secondary bond market remained new issue-centric.

NewPage Corp. remained active, as has been the case for almost the last two weeks. But the bonds ended higher Tuesday, which was a bit unusual.

OPTI Canada Inc. was also busy. Like NewPage, the debt gained ground, but on no fresh news. One trader speculated that a rise in oil prices might have had something to do with the increase.

Meanwhile, Nortel Networks Corp. inched up, while Dex One Corp. declined.

NewPage gains ground

As has been typical, NewPage's 10% notes due 2012 dominated trading Tuesday, according to traders.

One trader said the subordinated paper gained "almost 2 [points]" to close at 431/2, in "quite active" trading.

Another trader said about $20 million to $25 million of the debt turned over, pegging the notes at 431/2, up a point.

There has been no news out on the Miamisburg, Ohio-based coated papermaker since its May 12 earnings release. The disappointing results called the company's refinancing options into question, as NewPage has to refinance or repurchase its 10% notes due 2012 by Jan. 31 or else the maturity on its 11 3/8% notes due December 2014 is accelerated to March 2012.

OPTI up with oil

OPTI Canada's subordinated issues - the 7 7/8% and 8¼% notes due 2014 - were also actively traded and higher, traders reported.

One trader deemed the debt up 1½ points around the 48½ level. Another said the securities "bounced a little bit," ending "up a solid point" at 481/2.

The second trader said about $25 million to $30 million of the bonds changed hands.

A third trader said OPTI's subs were "stronger" at 48 bid, 48½ offered. With no fresh news out, the trader speculated that the gains came from a rally in oil prices.

"This is one that goes up and down with the market, based on oil," he said.

Oil gained $1.72, or 1.76%, to close at $99.42.

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

Nortel notes rally

A trader said Nortel networks' 10 1/8% notes due 2013 and 10¾% notes due 2016 "rallied," hitting a high of 94 before closing around 93.

Another trader said the notes were "kind of active," up half a point at 931/2.

He added that the 0% notes due 2011 were "unchanged, maybe up a half" around 90.

On Monday, the Toronto-based telecommunications company reported its first-quarter results, which were negatively impacted as the company has been winding down its business. Since filing for Chapter 11 protections in 2009, Nortel has sold "all of its businesses generating approximately $3.2 billion in net proceeds for the benefit of its creditors, and preserving 16,000 jobs for employees with the purchasers of the businesses," the company said in a press release.

Because of the sale of virtually all of its units, Nortel's results were negatively impacted. Revenues dropped to $20 million from $362 million the year before. Net loss came to $105 million, down from net profit of $355 million in the first quarter of 2010.

An auction on the company's patent portfolio is scheduled for June 20. Google Inc. has made the initial starting bid of $900 million and some are expecting that price tag will increase to $1 billion or more.

Dex One dips

Dex One's 12% notes due 2017 sank some in Tuesday trading, according to a trader.

The trader said there was no fresh news out, other than a research report put out by a dealer that recommended investors sell the debt.

He quoted the notes at 47 bid, 48 offered.

Another trader called the issue a point weaker around 48.

Dex is a Cary, N.C.-based phonebook publisher.

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