NewPage action lessens, bonds slip with market; Rite Aid dips with sector; Solo Cup flat

By Stephanie N. Rotondo

Portland, Ore., May 25 - Distressed debt trading was "a little soft to start" on Wednesday, a trader said, though he saw things getting "a little bit better" by the end of business.

"In the last hour or so, stuff was trading up instead of down," he said. "We'll see what tomorrow brings."

However, with the three-day weekend looming, traders are expecting the already new issue-focused market to get even more new issue-centric in the next couple of days.

Given the spotlight on new issues and the upcoming holiday break, trading in the distressed realm continued to center on the same names that have been dominating the arena for some time.

One such name is NewPage Corp. The bonds were essentially in the same zip code they have been for the last few sessions. But a trader did note that volume in the credit was far less than it has been over the past nearly two weeks.

General softness in the retail arena pushed Rite Aid Corp. paper lower, though a trader remarked that the name was "not particularly busy."

Solo Cup Co. was also not overly active, even as Moody's Investors Service cut its outlook on the company to stable from positive.

NewPage action dwindles

A trader called NewPage's 10% notes due 2012 down a point at 421/2.

Another trader quoted the issue at 42½ bid, 43½ offered.

"Today is the first day I can't remember seeing a lot of NewPage going across," the second trader said. "There was nothing like the volume that had been going on."

Since releasing disappointing earnings on May 12, NewPage has been the dominantly traded distressed credit. The earnings worried investors, as the Miamisburg, Ohio-based coated papermaker faces a looming repurchase or refinancing on its second-lien notes - or else deal with an accelerated maturity on its 11 3/8% notes due 2014.

Also in the paper space, Millar Western Forest Products Ltd.'s 8½% notes due 2021 were "down a couple points," a trader said, at 95½ bid, 96 offered.

Rite Aid softens with sector

Rite Aid's debt was deemed "softer" by a trader, though he added that the name was "not particularly busy."

The 9½% notes due 2017 fell a point, the trader said.

The 8 5/8% notes due 2015 were also down a point at 933/4.

At another desk, the 8 5/8% notes were seen slipping over a point to 93½ bid.

There was no fresh news out on the Camp Hill, Pa.-based drugstore chain, but the first trader remarked that "retail stuff was softer" in general.

Solo holds its ground

Moody's dropped its outlook on Solo Cup to stable from positive, but the news did little to move the bonds, according to traders.

A trader saw the 8½% notes due 2014 closing unchanged around 921/2, on "not much" trading.

Another trader pegged the issue at 92 bid, 93 offered.

"That's probably unchanged, but it wasn't really trading," the second trader said.

Solo Cup is a Lake Forest, Ill.-based manufacturer of packaging products for the food and beverage industry.

Caesars falls, DirectBuy flat

Elsewhere in the distressed market, a trader said Caesars Entertainment Corp.'s 10% notes due 2018 finished at 92½ bid, 93 offered, down from 93 bid, 93½ offered previously.

Another trader said DirectBuy Holdings Inc.'s 12% notes due 2017 were "still" trading in the low-40s.

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