NII Holdings pops on potential asset sale chatter; J.C. Penney little fazed by CEO salary cut

By Stephanie N. Rotondo

Phoenix, April 3 - There were "neither sellers nor buyers" in the distressed debt market on Wednesday, according to a trader.

As such, "most things traded down or were quoted down or were just quiet," he said.

Another trader noted that new issues in the high-yield arena were coming back into focus.

However, NII Holdings Inc. paper continued to be busy, as the bonds rose anywhere from 3 to 5 points on the day. The gains came on reports the company was in talks to sell its Peruvian unit.

J.C. Penney Co. Inc. was meantime little moved following news out Tuesday regarding a cut to Ron Johnson's salary. The retailer's chief executive officer was charged with turning the struggling business around and has thus far little to show for his efforts.

NII boosted by sale talk

NII Holdings' debt saw "heavy volume," a trader said, as the bonds put on anywhere from 3 to 5 points on the day.

He said the 7 5/8% notes due 2021 were the busiest of the structure, calling the issue up over 3½ points at 76 5/8. The 8 7/8% notes due 2019 put on over 5 points, closing at 81.

The 10% notes due 2016 then rose nearly 4½ points to 95.

Another trader said the name was "pretty active," calling the 7 5/8% notes "up a good bit" in a 77 to 78 context.

He deemed the 8 7/8% notes up "4-ish" points to 80½ bid, 81 offered.

On Wednesday, Bloomberg reported that the Reston, Va.-based provider of Nextel mobile phone service in Latin America was in talks with Chile's Empresa Nacional de Telecomunicaciones SA to sell its Peru unit.

Bloomberg referenced an article that came out on Tuesday in Peru's El Comercio.

According to the report, Entel would pay $500 million for the Peruvian business. The company has previously said that it was exploring the sale of its Peru, Chile and Argentina assets in order to focus on its markets in Mexico and Brazil.

J.C. Penney unchanged

On Tuesday, Plano, Texas-based retailer J.C. Penney said it had cut its CEO's pay by nearly 97%, given that turnaround efforts have yet to yield results.

Come Wednesday, however, the bonds were not much moved.

One trader said the 5¾% notes due 2018 were unchanged at 86, while the 7.95% notes due 2017 were up half a point to 95.

"I can't really say that levels were all that moved," another trader said, adding that the debt was "pretty quiet."

CEO Ron Johnson saw his 2012 salary cut to $1.9 million, the company said in a regulatory filing. Additionally, none of the senior management team received any cash bonuses.

Johnson was hired in late 2011 and was tasked with turning the company toward profitability. But one by one, his ideas have failed to reach their goals and many new policies, such as the eradication of sales and coupons, were ditched entirely due to consumer backlash.

Broad market mixed

Elsewhere in the distressed milieu, a trader saw Advanced Micro Devices Inc.'s 7¾% notes due 2020 falling almost a point to 96 5/8.

"They've always got issues," he said.

Another trader said Clear Channel Communications Inc.'s 11% notes due 2016 were "not much different," but added that they "continue to be active."

He pegged the debt "around 80."

A third trader said Edison Mission Energy bonds - which trade on top of one another - were stronger, quoting them at 54 bid, 54½ offered.

The trader also said that AmerenEnergy Generating Co.'s 7% notes due 2018 were "up near 2 points" at 82 bid, 82½ offered.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.