PDVSA bonds remain busy on Chavez health concerns; Momentive debt mixed as amendment approved

By Stephanie N. Rotondo

Phoenix, Jan. 15 - Recent new issues were in focus on Tuesday, leaving little behind for distressed bonds.

Petroleos de Venezuela SA's debt has been volatile in the last few weeks, given that Venezuela's leader, Hugo Chavez, has been in Cuba since mid-December, recuperating from a fourth cancer surgery that resulted in an infection. That volatility continued in Tuesday trading, as the bonds ended higher in active dealings.

Meanwhile, Momentive Specialty Chemicals Inc. was mixed on the day, as the company secured an amendment to its credit facility allowing for $1.1 billion in new bond issuance.

Chavez worries propel PDVSA

A trader said PDVSA was "at the top of the heat" during the trading session, as investors remain concerned about Chavez's health and a potential succession fight.

The 8½% notes due 2017 moved up over a point to end at 99¼ and the 9¾% notes due 2035 inched up half a point to 94 7/8.

Chavez traveled to Cuba in December to undergo a fourth surgery to remove an undisclosed form of cancer. The long-time Venezuelan leader was supposed to take his oath for his new term on Jan. 10, but failed to as he is still recuperating from a respiratory infection that was a result of the surgery.

Vice president Nicolas Maduro - whom Chavez said should be his successor last month - visited the president in Cuba this week and reported back to his country that Chavez was talking, but still fighting the infection.

As a result of the missed inauguration - and years of political turmoil - opponents of Chavez have attempted to force a succession vote, though Chavez's supporters claim the president can take the oath at any time. Still, concerns of his health and his ability to govern continue to mount.

Momentive bonds mixed

Momentive Specialty Chemicals' bonds were mixed on the day, following lender approval on a senior credit facility amendment that would allow for the issuance of $1.1 billion in new debt.

The 9% notes due 2021 were "unchanged, maybe down half a point" at 781/4, according to a trader. The 10% notes due 2020 slipped a touch to par 1/8, while the 8 7/8% notes due 2020 rose to 1031/2.

The Albany, N.Y.-based maker of silicone and other specialty chemicals needed the amendment in order to complete a recent debt exchange.

Distressed names soften

Elsewhere in the distressed arena, a trader said Nokia Corp.'s 5 3/8% notes due 2019 "drifted in with the market," closing at 97, off nearly a point.

Another trader saw ATP Oil & Gas Corp.'s 11 7/8% notes due 2015 trading around 7.

The second trader also noted that Clear Channel Communications Inc.'s 10¾% notes due 2016 had traded down to levels around 77.

And, Eastman Kodak Co.'s 9¾% second-lien notes due 2018 were "a little weaker" at 82 bid, 83 offered.

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