Exide bonds fall as company swings to loss; coal sector trades off; NII Capital paper rallies

By Stephanie N. Rotondo

Phoenix, Feb. 7 - The distressed debt market was "mostly down, but not a lot of volume," a trader said Thursday.

"It continued a little bit lower on the go-go stuff," he added.

Exide Technologies Inc. was weaker on the day following the company's earnings release late Wednesday. At least $32 million of the 8 5/8% notes due 2018 changed hands, according to a trader.

"That's big volume for Exide," he said.

The coal sector was meantime also taking a beating. James River Coal Co.'s bonds were seen down as much as 2 points, while Alpha Natural Resources Inc. dropped as much as 3 points.

While the broad market was soft, NII Capital Corp. continued to rebound from lows hit on Tuesday, when the company announced a 2013 revenue forecast that failed to excite investors.

Exide falls post-earnings

Exide Technologies' 8 5/8% notes were drifting lower after the company's released its fiscal 2013 third quarter results late Wednesday.

A trader called the debt down 1½ points at 831/2, on at least $32 million trading.

For the quarter, the Milton, Ga.-based battery manufacturer reported net sales of $784.1 million. Sales were negatively impacted by a foreign-currency translation.

Gross profit was $120.1 million, down $6.4 million from the previous year. Net loss came to $15.4 million, or 20 cents per share. That compared to net income of $68.2 million, or 84 cents per share.

"Continued higher spent battery acquisition costs in the Americas combined with lower margins from third party lead sales negatively impacted gross margin by approximately $11 million," the company said in a press release. "Improvement in spent battery acquisition costs in the U.S. began in November 2012. This trend has continued into the early part of the fiscal fourth quarter which should benefit both Americas businesses if the trend continues."

Coal sector under pressure

Coal names were getting hit in Thursday trading, according to market sources.

One trader saw James River Coal's 7 7/8% notes due 2019 falling a deuce to 511/2, while Alpha Natural Resources' 6% notes due 2019 dropped nearly 1½ points to 87 5/8.

The trader also saw Arch Coal Inc.'s 7% notes due 2019 slipping a point to 873/4.

At another desk, a source pegged Alpha Natural's 6¼% notes due 2021 at 86¾ bid, down 3 points on the day.

NII Capital rebound continues

NII Capital paper continued to rebound in Thursday trading, after taking a dive earlier in the week.

The 7 5/8% notes due 2021 were up 2½ points to 721/4, a trader said. The 10% notes due 2016 meantime put on nearly a point to close around 923/4.

The company's debt took a big hit Tuesday after the company released a revenue forecast for 2013 that was disappointing.

The paper began to stage a comeback on Wednesday.

The Reston, Va.-based provider of telecommunications in Latin America said it expected to see revenues of $5.7 billion to $5.9 billion. Analysts polled by Bloomberg were expecting an average of $6.1 billion.

The company also said that it was launching $400 million of bonds due 2019. Proceeds from the offering will be used for general corporate purposes, which may include network expansions and upgrades.

Caesars loses ground

A trader said Caesars Entertainment Corp.'s 8½% notes due 2020 were off a point to 963/4, on "almost" $20 million traded.

Another market source saw the 10% notes due 2018 at 64 bid, off 2 points.

Caesars is a Las Vegas-based casino operator.

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