Travelport bonds fall again; Cengage loses ground ahead of call; Nebraska Book case moved back

By Stephanie N. Rotondo

Portland, Ore., Sept. 20 - The distressed debt market was firmer as a whole Tuesday, but patches of weakness remained.

Travelport Ltd., for instance, continued to decline. The bonds had begun to fall on Monday after the company announced a restructuring of its bank debt that has not been viewed as favorable to bondholders.

Cengage Learning Acquisition Co. was also on the softer side, though trading was significantly less than in Travelport.

And, continuing the downward focus, Nebraska Book Co. Inc.'s bonds were seen slipping. The company's confirmation hearing was delayed Tuesday due to financing issues.

Travelport remains weak

Travelport's debt continued to weaken after the Atlanta-based company announced a restructuring of Travelport Holdings Ltd.'s roughly $715 million unsecured PIK term loan due March 27, 2012.

"The exchange isn't favorable [to bondholders]," a trader said. As such, "those bonds were getting beat up."

He saw the 11 7/8% notes due 2016 falling to around 52 from "54-ish" previously.

Another trader quoted the 9 7/8% notes due 2014 at 78½ bid, 79½ offered on "pretty heavy volume."

The travel industry services provider said Monday that it would launch an amendment to its senior secured credit facility that would allow for the restructuring of the loans. Under the amendment, the company would be allowed to get a new $342.5 million second-lien loan, the current accordion feature would be terminated, the total leverage ratio would be increased and a first-lien leverage ratio would be added.

The amendment would also add a minimum liquidity requirement, revise restricted payments capacity and the general basket for investments, increase the excess cash flow sweeps and provide additional collateral.

Cengage getting hit

Like Travelport, Cengage Learning Acquisitions' 10½% notes due 2015 were getting "beat up," according to a trader.

He said the notes were down 4 to 5 points, straddling 70.

Another trader said the bonds were "definitely quoted lower," though he added that volume was muted.

He quoted the 10½% notes at 70 bid, 72 offered, deeming that "down a lot."

There was no fresh news out on the Florence, Ky.-based educational company, but Cengage has scheduled a conference call for Friday.

"It's got to be just in front of that call," the first trader said as explanation for the day's losses.

Nebraska Book falls

Nebraska Book Co.'s debt was "loosely quoted" lower, a trader said, "but it's quiet."

The 10% notes due 2011 were seen trading in odd pieces between 94 and 96, while the 8 5/8% notes due 2012 was seen around 60.

A second trader said the 10% senior notes were quoted in the low-90s, placing them around 93.

The company's confirmation hearing was postponed to Oct. 27 on Tuesday as the company has not yet lined up exit financing.

Nebraska Book is a Lincoln, Neb.-based textbook seller.

Broad market gains strength

Elsewhere in distressed issues, a trader said Caesars Entertainment Corp.'s 10% notes due 2018 moved up to 71½ bid, 72½ offered.

Another trader said Lehman Brothers Holdings Inc.'s debt inched up as much as half a point to "25-ish."

And, NewPage Corp.'s 11 3/8% notes due 2014 and 10% notes due 2012 were holding their ground at 85½ bid, 86 offered and "13-ish," respectively.

Sara Rosenberg contributed to this article

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