Travelport bonds pop; Edison Mission Energy debt still weak; ATP Oil sees CEO exit, debt dips

By Stephanie N. Rotondo

Phoenix, Jan. 4 - It was a strong first week of trading for the distressed debt market as 2013 began.

A trader noted that "volume is returning to normal" as more players return to their desks.

Travelport LLC paper was up at least 4 points on the day, according to traders. One trader said there was news of a new deal with AMR Corp. that was driving the push higher.

But while the market was largely firm, some distressed names were getting kicked around.

Edison Mission Energy debt remained weak, as investors speculated about a tax-loss carryback provision that could potentially hurt the bankrupt utility. ATP Oil & Gas Corp. was meantime softer as the company announced that T. Paul Bulmahn had resigned as executive chairman as of Dec. 31.

Travelport runs up

Travelport bonds were moving up dramatically on Friday, spurred by news of a deal with airline AMR Corp., a trader said.

The trader said the agreement had something to do with a lawsuit pending between the parties, in which they agreed to "chill" the proceedings for all of 2013, "or something like that," he said. He noted that the deal was "of little value to AMR but it was a big deal to Travelport."

As such, he saw the 9 7/8% notes due 2014 in a 90-91 context.

Another trader pegged the 9 7/8% notes at 911/4, up a deuce, and the 11 7/8% notes due 2016 at 26, up about 1½ points.

Meanwhile, AMR's benchmark 6¼% convertible notes due 2014 continued to rise, breaking the 90 barrier on Friday.

A trader noted that "all airlines were up," following news of fare increases across the industry.

Travelport is an Atlanta-based services provider for the travel industry.

Edison remains soft

Edison Mission Energy saw its debt - which tends to trade in line with one another - fall again on Friday, trading into a 49-handle, according to a trader.

The bonds have fallen at least 5 points since the start of the year, the trader said, due to speculation about how a tax-loss carryback provision of the fiscal cliff deal with affect the bankrupt utility.

Prior to year's end, the Santa Ana, Calif.-based power producer had negotiated a tax-loss carryback deal with the government, the trader explained. But a provision of the recently inked fiscal cliff deal has potentially decreased the value of that.

"It's all been speculation," he said. "But there's no question about it, the bonds are down 5 points."

ATP slips as Bulmahn resigns

Houston-based oil and gas exploration company said in a regulatory filing late Thursday that its executive chairman, T. Paul Bulmahn, had resigned as of Dec. 31.

Bulmahn will stay on the board as its chairman.

A trader said the news resulted in a slight dip for bankrupt ATP's 11 7/8% notes due 2015, though the loss was nothing "dramatic," he said.

He quoted the issue at 10½ bid, 11 offered.

In other oil and gas companies, a trader said there was "some selling pressure late in the afternoon" in Dallas-based EXCO Resources Inc.'s 7½% notes due 2018.

He called the issue down about a point at 96 5/8.

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