Hovnanian extends losses into Wednesday; Clear Channel busy, softer; GenMar steady pre-numbers

By Stephanie N. Rotondo

Portland, Ore., July 27 - Most distressed debt issues were "quoted lower," a trader said Wednesday, though he noted that there was "not a lot of action."

Hovnanian Enterprises Inc. paper was again weaker, continuing the losses from Tuesday. The declines came on the back of a weak housing report.

Clear Channel Communications Inc. was also on the downside, though there was no news out to explain why.

In earnings news, General Maritime Corp. announced its second-quarter results after the market closed. But ahead of the release, traders saw little action in the company's debt and one pondered what might happen after the conference call Thursday morning.

Energy Future Holdings Corp. dropped as much as 5 points during midweek trading, according to a trader. The company said in a regulatory filing that a new Environmental Protection Agency rule could result in the closure of some of its plants.

Hovnanian falls again

After Tuesday's weak housing report - in which the U.S. Department of Commerce reported a 1% decline in home sales for June - Hovnanian Enterprises' debt began a downward descent.

That trend continued into the midweek session. One trader called the 10 5/8% notes due 2016 1½ points softer at 933/4, while another called the issue nearly 2 points weaker at 93¾ bid.

Another trader called the paper down "a point or so" at 93 bid, 93½ offered.

"Obviously, homebuilders are heavy in general, especially when the market is down 200 bucks," he said.

Last month, the Red Bank, N.J.-based homebuilder posted its second-quarter earnings. For the period ending April 30, revenues were $255.1 million, compared with $318.6 million the year before. Net loss was $72.7 million, or 69 cents per share, versus a loss of $28.6 million, or 36 cents per share, for the same quarter of 2010.

Clear Channel weakens

Clear Channel Communications' bonds were lower and active, though there was no fresh news out on the San Antonio-based multimedia company to act as a catalyst.

One trader saw the 10¾% notes due 2016 falling a deuce to 89½ in "pretty active" trading. Another called the debt "down roughly a point," the 10¾% notes at 90 and the 11% notes due 2016 around 88.

GenMar quiet ahead of numbers

General Maritime released its second-quarter results after Wednesday's market close, but traders saw little action in the oil containership company's debt ahead of the results.

"I haven't seen any activity yet, but we'll see what happens [Thursday]," a trader said.

Another trader said there were a "bunch of little trades" all around the 72 level, which he deemed "pretty much unchanged."

For the quarter ended June 30, GenMar posted a wider-than-anticipated net loss of $24 million, or 21 cents per share. That compared with a net loss of $14.3 million, or 25 cents per share, the year before.

Revenues got knocked down 12.2% to $53.6 million.

Analysts polled by Thomson Reuters were expecting a loss of 27 cents per share on revenues of $56.05 million.

"General Maritime has continued to take important steps to strengthen its balance sheet and capital structure, which has enhanced the company's ability to operate in a challenging market environment and improved its future prospects," John Tavlarios, president and chief executive, said in the earnings release.

"During the second quarter and into the current third quarter, General Maritime has completed a number of important transactions aimed at increasing the company's liquidity and financial flexibility."

GenMar is based in New York.

TXU bonds decline

A trader said Energy Future Holdings' 10¼% notes due 2015 were "down a bunch" about 4 or 5 points to close around 50.

The losses came as the Dallas-based power producer said in a regulatory filing that a new federal rule aimed at reducing air pollution from power-generating plants will likely cause it to shutter some of its plants and will also result in "material revenue decreases."

TXU, as the company is more commonly referred to, also said it would probably see a noncash impairment charge of $400 million in the third quarter.

The new rule was issued by the Energy Protection Agency last week. The Cross-State Air Pollution Rule is designed to curb emissions of nitrogen oxides and sulfur dioxide at power plants in 27 states.

Because of the rule Jan. 1 effectiveness, TXU said it would not have time to fix its plants in order to remain in compliance.

Among other energy and energy-related names, Dynegy Inc.'s 7.67% notes due 2016 fell almost 2 points to 781/4, according to a trader.

The trader also said that OPTI Canada Inc.'s 7 7/8% and 8¼% notes due 2014 "weren't that active," trading around 64 bid, 64½ offered.

Another trader pegged OPTI's issues at 643/4.

NewPage dips, financials gain

In other distressed issues, NewPage Corp.'s 10% notes due 2012 - which have been steadily climbing up recently - dropped about 3½ points to 231/2, a trader said.

At another desk, a trader said Lehman Brothers Holdings Inc.'s 6 7/8% notes due 2018 were "fairly active" and slightly better around 271/2.

And, Ambac Financial Group Inc.'s paper - all the issues trade on top of one another - headed up to finish around 15 as the bankrupt company said it had extended its reorganization plan deadline and rescheduled its disclosure statement hearing.

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