NewPage monthly report pressures debt; Bon-Ton gives back some gains; Edison bonds lose ground

By Stephanie N. Rotondo

Phoenix, June 1 - It was "pretty much a down day" in the distressed debt realm, a trader reported Friday, as a dismal jobs report added to investors' skittishness.

Investors have already been gun-shy of late, given the current and ongoing debacle in Europe.

A trader remarked that "stressed" distressed names were generally down 2 to 3 points on the day, while the general market was down just a point.

NewPage Corp. bonds remained a big loser. The bonds had previously been falling in sympathy with a mill fire at one of sector peer Verso paper Corp.'s properties. But Friday's declines were all their own, a trader said, due to the company's monthly operating report.

Elsewhere, Bon-Ton Stores Inc. had been a gainer in Thursday trading, but gave up some of the gains incurred then, given the broader tone of the market. The bonds had moved up Thursday on an improved monthly sales report.

In the energy realm, Edison International Inc.'s paper was "down across the board," according to a trader. The energy producer's debt dropped 1 to 3 points on the day.

NewPage declines again

NewPage's 11 3/8% first-lien notes due 2014 were "down a bit," a trader said, following the release of the company's monthly operating report.

He called the paper "a couple points" lower around 60.

Another trader agreed that they were lower on the day, pegging them at "+/-60."

For the month of April, the Miamisburg, Ohio-based papermaker reported a net operating loss of $26.7 million on net sales of $250.9 million.

The net loss was wider than March's figures and sales were down.

The company also was burning through cash. Cash and equivalents stood at $4.35 million at the end of April, compared to $11.43 million at the end of March.

Bon-Ton gives up gains

Bon-Ton Stores reported improved same-store sales for the month of May on Thursday, but gains incurred in that session were nearly wiped out come Friday.

"They had a pretty good run-up yesterday," a trader said. The 10¼% notes due 2015 had gotten as good as 74 before coming back down to 69 bid, 70 offered in the previous session. On Friday, the bonds dropped to 68 ½ bid, 69 offered.

Another trader called the notes down 3 points at 683/4.

For the four weeks ending May 26, same-store sales rose 1.5%, the company said in a press release. Total sales increased 1.2% to $183.1 million.

The York, Pa.-based retailer also said that it had gained borrowing capacity under its credit facility.

The company had $423 million available, it said, compared to $400 million available at the end of April.

Edison paper falls

There was no fresh news out on Edison International Friday, but falling energy prices, combined with generally poor economic data weighed on the company's debt nonetheless.

A trader placed the 7% notes due 2017 linked to Edison Mission Energy at 511/2, down a couple points.

Another trader said the Rosemead, Calif.-based power producer's debt was "down across the board," seeing the 7% notes down 3 points at 51 and the 7.2% notes due 2019 down a deuce, also around 51.

The 7½% notes due 2013 and the 7¾% notes due 2016 were both down 1½ points, he said, at 56½ and 52, respectively.

Among other energy and related names, Patriot Coal Corp.'s 8¼% notes due 2018 lost 2½ points to close around 48, according to a trader. Another trader said Dynegy Holdings LLC's 7¾% notes due 2019 were "active, but unchanged" around "61-ish," after a bankruptcy judge approved a new agreement with junior bondholders.

Broad market loses ground

In the rest of the distressed debt sector, a trader said Eastman Kodak Co.'s bonds "keep drifting," seeing the 7¼% notes due 2013 trading around 12 1/2, while the 9¾% second-lien notes due 2018 were at 64.

Another trader also placed the 7¼% notes around the 12 mark.

Clear Channel Communications Inc.'s 10¾% notes due 2016 were deemed "definitely weaker" around 63.

In the chemical arena, Momentive Performance Materials Inc.'s 9% notes due 2021 fell 2½ points to 73, while Hexion Specialty Chemicals Inc.'s 9% notes due 2020 lost a deuce, closing around 841/2.

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