Distressed market sees strength; Ameren posts loss, bonds firm; Kodak funding due Thursday

By Stephanie N. Rotondo

Phoenix, Feb. 20 - Distressed bonds were firming in the midweek trading session.

"Everything was up," a trader said.

Even Ameren Energy Generating Co. got boosted, despite the power producer reporting a swing to a loss in the fourth quarter.

Other names were also benefitting from the up day, such as AMR Corp. A trader said the company's bonds were trading at "par plus accrued discounted," seeing the 9% notes due 2016 trading around 109.

Overseas Shipholding Group Inc.'s 8 1/8% notes due 2018 continued to gain momentum. A trader called the issue "up a couple points" at 39 bid, 40 offered, which was "where they were before the [Internal Revenue Service] claim was filed."

And, MF Global Futures Ltd.'s 6¼% notes due 2016 were "up a point or so" to 781/2.

Another trader said Reader's Digest Association Inc.'s floating-rate notes due 2017 weren't "all that active," though they did move up a few points to a 33-34 context.

Ameren swings to loss

St. Louis-based Ameren reported a loss for the fourth quarter, but a trader said the bonds were moving up nonetheless.

The trader pegged the 7% notes due 2018 at 57, which he deemed up a deuce.

However, another market source called the issue weaker at 56 bid, 57 offered. The 7.95% notes due 2032 were unchanged at 52 bid, 53 offered.

For the quarter ended Dec. 31, Ameren posted a loss of $1.16 billion, or $4.76 per share. That compared to a profit of $25 million, or 10 cents per share, the year before.

Excluding certain charges, including a write-down on its to-be-exited merchant generation business, profit was 14 cents per share.

Operating revenue was down 4% to $1.51 billion.

For the full year, net loss was $974 million, or $4.01 per share. For 2011, the company had reported earnings of $519 million, or $2.15 per share.

Ameren also provided an adjusted earnings forecast for 2013 of $2.00 to $2.20 per share.

Kodak deadline approaches

A funding deadline for Eastman Kodak Co.'s new debtor-in-possession loan comes on Thursday, a trader said.

The trader noted that the bonds have "been under pressure going into that."

The trader said he was not sure how much paper traded but said he saw the 9¾% second-lien notes due 2018 quoted at 77 bid, 78 offered.

Another market source called the 7¼% notes due 2013 down half a point at 13½ bid.

Kodak is a Rochester, N.Y.-based digital imaging company that is operating in bankruptcy.

Revel gyrates on filing

Revel AC Inc.'s term loan B moved around in trading on Wednesday, as the company announced late in the previous session that it plans to file for Chapter 11 in an effort to reduce debt, according to a trader.

The term loan B started the day at 41 bid, 43 offered and by late day it had moved to 36 bid, 38 offered, the trader said. On Tuesday, the loan was quoted at 37 bid, 39 offered.

Under the bankruptcy plan, credit facility lenders will convert their claims on a pro rata basis into a new secured super-priority priming DIP credit facility that will be repaid in full by an exit facility, and term loan lenders will receive their pro rata share of 100% of new common equity to be issued by the reorganized company.

Also, holders of the company's 12% second-lien notes will receive their pro rata share of $70 million of new notes.

This plan has already received support from debt holders, and lenders have agreed to forbear from exercising remedies regarding the company's failure to pay a term loan interest payment on Tuesday.

Revel is an Atlantic City, N.J.-based gaming and entertainment company.

Sara Rosenberg contributed to this article

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