NII Holdings bonds continue to run higher; J.C. Penney debt dips as Hayman sells equity stake

By Stephanie N. Rotondo

Phoenix, Dec. 6 - Despite a generally light day in the overall markets, a trader said the distressed market continued to be focused on NII Holdings Inc.

"They continued their resurgence," the trader said, adding that the name was the "big gainer of the day."

He saw the 10% notes due 2016 moving up 1¼ points to 573/4, while the 7 5/8% notes due 2021 gained 1¾ points to end at 461/4.

There hasn't been any fresh news out on the Reston, Va.-based company. But given the debt's several-week decline, investors could be seeing a new opportunity in the distressed universe - something that has been lacking significantly this year.

Meanwhile, J.C. Penney Co. Inc.'s bonds were on the weaker side, though not overly active, as Hayman Capital Management LP disclosed that it had divested its entire equity stake in the struggling retailer.

The hedge fund still holds J.C. Penney debt, however.

A trader said the 6 7/8% notes due 2015 fell 1½ points to 931/2. Another market source pegged the 5.65% notes due 2020 at 79¾ bid, down nearly a point.

The stock (NYSE: JCP) meantime fell 77 cents, or 8.7%, to $8.08.

J.C. Penney itself also disclosed late Thursday that it had received inquiries about its finances, as well as a public stock offering done in September, from the Securities and Exchange Commission. The company had raised over $700 million in the equity offering, but some investors were irked by the sale, claiming the company misled them in August when it said there was no reason to seek fresh capital.

Elsewhere in the distressed space, a trader saw Residential Capital LLC's junior debt - such as the 8½% notes that were to have come due earlier this year - at 363/4, while the senior debt - the 9 7/8% notes due 2015 - were at 111.

Earlier this week, the former mortgage unit of Ally Financial Inc. inked a deal with junior bondholders that would allow them to exit bankruptcy.

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