Nortel notes creep up; Geokinetics files, bonds hold steady; Sorenson firms as loan increased

By Stephanie N. Rotondo

Phoenix, March 11 - There was a "firm to unchanged tone" in the distressed debt market on Monday, according to a trader.

"There was no real big price movers," the trader added.

Another trader said that "just about everything is creeping up."

Yet another source noted that new issues were taking the bulk of the focus.

Nortel Networks Corp. remained strong, as investors continued to react to news out late Friday about a potential cash distribution.

Meanwhile, Geokinetics Holdings USA Inc.'s debt was holding steady as the company officially filed for bankruptcy.

And, Sorenson Communications Inc.'s bonds were inching higher as the company increased the amount of a new term loan.

Elsewhere in the market, a trader saw Clear Channel Communications Inc.'s 10¾% and 11% notes due 2016 slipping at least a point, to 74¼ and 753/4, respectively.

Another trader said that Overseas Shipholding Group Inc.'s 8 1/8% notes due 2018 were firm again, ending around 531/4.

Nortel keeps creeping

Nortel Networks' debt was firm again Monday, as investors continued to react positively to news of a joint cross-border trial that will eventually decide how as much as $9 billion will be distributed.

A trader said the 10¾% notes due 2016 "continue to creep up," pegging the issue around "114-ish."

Another trader placed the issue - as well as the 10 1/8% notes due 2013 - at "1141/4-ish."

News of the pending trial came out late on Friday. The Canadian telecommunications company filed for bankruptcy in 2009 and has been in process of liquidating. The joint U.S.-Canada is expected to begin late this year.

Geokinetics holds on filing

Geokinetics' 9¾% notes due 2014 were holding in as the company announced it had officially filed for Chapter 11 protections.

A trader placed the debt around 51, which he deemed unchanged.

In early February, the company said it had reached a restructuring deal with a majority of its bond and preferred holders that would call for a pre-packaged bankruptcy. Geokinetics had sought the deal after skipping a coupon payment.

Under the terms of pre-pack plan, bondholders will see all of their holdings converted into 100% of the new equity.

Geokinetics, based in Houston, is a provider of seismic data acquisition, seismic data processing services and multi-client seismic data to the oil and gas industry.

Sorenson rises as loan upped

A trader said Sorenson Communications' 10 ½% notes due 2015 were moving higher following news the company had increased the size of a term loan currently being shopped.

He saw the issue trading in a "+/- 87" context.

The Salt Lake City-based video relay telecommunications provider increased the size of a proposed term loan B to $550 million from $500 million.

Price talk remained unchanged at Libor plus 825 bps, with a 1.25% Libor floor and an expected issue price of 99½ to par.

The company intends to use proceeds to pay off another term loan. Additional funds will be used to shore up the company's balance sheet.

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