AmerenEnergy bonds see big gains again; Verso, Overseas Ship rise on no news; Sears debt firms

By Stephanie N. Rotondo

Phoenix, March 21 - Distressed bonds were firming in Thursday trading, according to market sources.

Still, the focus remained on new high-yield issues.

AmerenEnergy Generating Co.'s debt continued to climb. The bonds put on as much as 4 points in the previous session and added as much as 5 points on Thursday.

There was still no fresh news out to explain the gains.

Meanwhile, Verso Paper Corp.'s bonds were also strong, though like Ameren, there was no news to act as catalyst.

Ameren notes spike

After rising sharply on Wednesday, AmerenEnergy bonds continued to pop in Thursday trading, according to a trader.

The trader said the 7% notes due 2018 were the "biggest mover of the day" in terms of price, gaining 5 points to end at 82.

Both the 7.95% notes due 2032 and the 6.3% notes due 2020 were up 2½ points, he said, at 75½ and 75, respectively.

Another trader pegged the 7% notes at 82 and the 7.95% and 6.3% notes at 76.

On March 14, the power producer said it had inked an agreement with Dynegy to sell its merchant generating business. Though Ameren will not receive any cash in the deal, Dynegy is assuming about $850 million of Ameren's debt.

Ameren is also expected to realize $180 million in tax benefits.

Verso bonds pop

Memphis, Tenn.-based Verso Paper saw its 11¾% notes due 2019 get a boost, though without any fresh news to prompt the gain.

A trader called the issue up 2½ points at 823/4.

In other names seeing sizable gains without any news, a trader said Overseas Shipholding Group Inc.'s 8 1/8% notes due 2018 were up 7 to 8 points at 75.

"The equity was up 50% as well," he said. "I did not see any specific news."

The company's stock (OTCBB: OSGIQ) was up $1.12, or 51.38%, at $3.30.

Sears up, J.C. Penney down

In the retail space, Sears Holding Corp.'s 6 5/8% notes due 2018 put on 2 points to end at 99 5/8, a trader said.

The gains came as the company said its current chief executive, Edward Lampert, had agreed to stay at his post. Lampert also agreed to an annual salary of $1.

Also, J.C. Penney Co. Inc.'s 5.65% notes due 2020 dropped over a point to close at 80¼ bid.

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