NII debt ends mixed; coal sector names up; retailers dip; Logan's Roadhouse loses post-numbers

By Stephanie N. Rotondo

Phoenix, Dec. 11 - The usual suspects continued to be volatile in the distressed debt realm on Wednesday.

NII Holdings Inc.'s 10% notes due 2016 were weaker during midweek trading, falling almost half a point to 57 5/8. However, the 8 7/8% notes due 2019 moved up over 2½ points to 43, according to a trader.

In the coal arena, Arch Coal Inc.'s 7¼% notes due 2021 improved by 1¾ points, finishing around 76. The company's 7% notes due 2019 were meantime a point higher at 783/4.

Sector peer Alpha Natural Resources Inc. saw its 6% notes due 2019 rising "a point and change," according to a trader, to end at 89 3/8. Another market source pegged the 6¼% notes due 2021 at 88¼ bid, which was up fractionally.

In the retail milieu, a trader said RadioShack Corp.'s 6¾% notes due 2019 slipped to 663/4, though he noted it was only a single trade.

The trader also saw J.C. Penney Co. Inc.'s 7.65% notes due 2016 dropping over 5 points to an 88½ to 89 context.

"They were trading 92-ish at the end of last week," he said. He further remarked that there was a headline about the Plano, Texas-based company that indicated its U.S. store sales were down for the year.

At another desk, a source called the 5.65% notes due 2020 off almost a point at 79 bid.

Logan's Roadhouse dives

Logan's Roadhouse Inc.'s 10¾% notes due 2017 got hit hard after the parent company, LRI Holdings Inc., reported earnings for its first fiscal quarter of 2014.

The numbers came late Tuesday.

A trader said the bonds were down nearly 10 points, trading around 771/4.

For the quarter ended Oct. 27, the Nashville-based restaurant operator reported net sales of $147 million, a 2.2% decline from the previous year. Comparable restaurant sales dropped 5.2% and the average check amount improved by 1.4% - despite a 6.5% decrease in customer traffic.

Net loss was $12.07 million, which compared to $10.06 million the year before.

In the earnings release, the company attributed a dip in sales to a challenging economic and competitive market.

Patriot loan breaks

Patriot Coal Corp.'s $250 million first-lien second-out term loan (B3) began trading on Wednesday, with levels quoted at par bid, 101 offered, a trader said.

Pricing on the loan is Libor plus 800 bps with a 1% Libor floor and it was sold at a discount of 98. The debt has hard call protection of 102 in year one and 101 in year two.

During syndication, pricing on the loan was increased from talk of Libor plus 725 bps to 775 bps and the discount widened from 99.

The company's $576 million five-year credit facility, which is expected to close on Dec. 18, also includes a $125 million asset-based revolver and a $201 million first-lien, first-out letter-of-credit facility.

Barclays and Deutsche Bank Securities Inc. are leading the deal, with Barclays the agent on the term loan and letter-of-credit facility and Deutsche the agent on the revolver.

Senior secured leverage is 1.8 times and total leverage is 1.9 times.

Proceeds will be used to support the company's emergence from Chapter 11.

Patriot Coal is a St. Louis-based miner, producer and seller of thermal coal.

Sara Rosenberg contributed to this article

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