NII Holdings plans asset sale, bonds rise; Lehman gains post-distribution; Kodak stubs firmer

By Stephanie N. Rotondo

Phoenix, April 5 - As the week came to a close, distressed bonds were firming up.

NII Holdings Inc. was a name being bandied about, as the company officially announced a sale of its Peruvian unit. Talk of a potential sale was first reported on Wednesday, which resulted in as much as a 5-point gain for the bonds. A trader said the debt tacked on another 3 points on the back of the sale news.

Meanwhile, Lehman Brothers Holdings Inc.'s bonds ticked up after the company's third distribution was paid out on Thursday. Though the payout was the equivalent to 5 points, traders saw the bonds rising at least a point on Friday.

NII Holdings rises on sale

Late Thursday, Reston, Va.-based NII Holdings announced it was selling its Peruvian business to Chile's Empresa Nacional de Telecomunicaciones SA for about $400 million.

Word of the potential sale was first reported on Wednesday.

A trader said the news resulted in a 3-point pop for the company's debt, seeing the 8 7/8% notes due 2019 at 84 and the 7 5/8% notes due 2021 in a 79 to 80 context.

The official sale price was less than the expected $500 million. The deal is expected to close in the second half of 2013.

Proceeds from the sale will be used to invest in next-generation networks in Mexico and Brazil, where the company's Nextel mobile phone service is most popular.

Lehman popular post-distribution

Lehman Brothers was a "big name" on Friday, following a $14.2 billion payout to creditors on Thursday.

The distribution was the third such payment to be made since the company filed for bankruptcy in 2008. A fourth distribution is expected in September.

The trader pegged the bonds generically at 23 bid, 23½ offered, up half a point from post-distribution levels.

Another trader also placed the debt around the 23 mark, which he deemed up from post-payout levels of 22.

The distribution was equivalent to 5 points, the traders explained. A total of $46.9 billion has been paid to creditors since a restructuring plan was approved in December 2011.

Kodak stubs stronger

Traders continued to see strength in Eastman Kodak Co.'s second-lien stubs on Friday.

"They were pretty strong," one trader said, calling the pieces up 4 points to "59-ish."

"They continue to trade higher," said another trader who placed the leftover bonds in the high-50s.

"I think people think they are cheap and that there is very little supply," the second trader opined as the reason for the stubs' gains.

Broad market mostly firm

Among other distressed names, a trader said ATP Oil & Gas Corp.'s 11 7/8% notes due 2015 softened slightly to 5½ bid, 6 offered.

The trader also called AmerenEnergy Generating Co.'s 7% notes due 2018 up a point at 84.

"I think natural gas has been rallying," he pointed out.

Another trader saw Exide Technologies Inc.'s 8 5/8% notes due 2018 recoup a bit of ground lost in the previous session on the back of news regarding a switch of restructuring advisors.

The trader said the notes were "straddling 80."

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