McClatchy notes gain on property sale; Dynegy debt declines, no catalyst seen; NewPage steady

By Stephanie N. Rotondo

Portland, Ore., May 27 - The three-day holiday weekend started early for some distressed debt players, resulting in a lackluster trading day for distressed credits.

"Almost nothing was trading today," a trader said.

Ahead of the bell, a trader said that most of the focus was on recent new issues and five-B paper. Discounting that, trading in the secondary space was only around $200 million, he estimated.

"It's really thin," he said. "Even the stock market has quieted down."

McClatchy Co. paper saw some action, as the company announced it had sold its Miami property. Moody's Investors Service then upped its rating on the newspaper publisher, given the expectation that the company will use proceeds to pay down debt.

Meanwhile, Dynegy Inc.'s debt traded downward, though there was no fresh news out.

McClatchy debt firms

A trader said McClatchy bonds were "better" after the company said it sold its Miami property for $236 million to Genting Malaysia Bhd.

The 14-acre property was the home of the Miami Herald. McClatchy has two years to locate another premises.

The trader said both the 11½% notes due 2017 and the 6 7/8% notes due 2029 were "up a couple points" at 110 and 63, respectively.

Another trader said that McClatchy "had real news" which sent its bonds up.

Proceeds from the sale of the property will be used for the company's pension plan, as well as to reduce debt.

Moody's upped its outlook to positive from stable on the news and affirmed its Caa1 corporate family rating.

Dynegy bonds dip

Houston-based power producer Dynegy saw its debt fall "a smidge," according to a trader.

He placed the 7¾% notes due 2019 around "72-ish."

Another trader deemed the paper down a point, around 721/2.

Another market source said the bonds were down 1½ points to 72½ bid.

There was no news out to cause the decline.

Paper unchanged to up

NewPage Corp.'s 11 3/8% first-lien senior secured notes due 2014 trading around 96½ bid, 97 offered, while its 10% second-lien notes due 2012 were at 42 bid, 43 offered.

He said the Miamisburg, Ohio-based coated-paper manufacturer's bonds were "slightly better, but not a whole lot."

He said there were "no real trades" in the usually active 10s, while the 11 3/8s had "a couple of trades" but were largely unchanged.

He said sector peer Catalyst Paper Corp.'s 7 3/8% notes due 2014, which "had been heading lower the whole week," were unchanged at 51 bid, 53 offered.

The Richmond, B.C.-based papermaker's 11% senior secured notes due 2016 were unchanged to "maybe up a half point by the end of the day," at 88½ bid.

Paul Deckelman contributed to this article

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