NII Capital debt rises in active trading; J.C. Penney mixed, stays topical; broad market firms

By Stephanie N. Rotondo

Phoenix, April 11 - Distressed bonds were firm again on Thursday.

"Everything was up today 1½ points across the board," a trader remarked.

NII Holdings Inc.'s NII Capital Corp. paper was trading actively, just one day after the company priced an add-on to its 11 3/8% senior notes due 2019. The debt was up as much as 3 points on the day.

Elsewhere, J.C. Penney Co. Inc. remained topical, as a judge ruled that Martha Stewart violated a contract with Macy's when she agreed to design products for the struggling J.C. Penney. Also, investor Bill Ackman conceded that his hand-picked chief executive Ron Johnson was a mistake for the company.

Meanwhile, Exide Technologies Inc. and Momentive Performance Materials Inc. continued to be traded heavily in the distressed space.

A trader saw Exide's 8 5/8% notes due 2018 closing down a touch at 76, while Momentive's 11½% notes due 2016 rose over a point to 661/2.

NII bonds on the rise

NII Capital's bonds were trading actively and better, according to a trader.

The trader called the 8 7/8% notes due 2019 up "almost 3 points" at 88 3/8. The 10% notes due 2016 gained nearly 1½ points, closing at 991/2.

And, the 7 5/8% notes due 2021 inched up just over half a point at 821/4.

Another market source pegged the 10% notes at 99¾ bid, par offered versus 98 bid, 98 1/8 offered previously. The 8 7/8% notes were quoted at 88 bid, 88½ offered, compared to 85 3/8 bid, 85½ offered and the 7 5/8% notes were seen trading with an 84 handle, versus previous levels around 81.

On Wednesday, the Reston, Va.-based provider of Nextel mobile phone service in Latin America priced a $150 million add-on to its 11 3/8% notes due 2019. The privately placed noes were priced at a premium.

Also on Wednesday, parent company NII Holdings announced its first phone made with new software that will offer walkie-talkie service. The software can also be used on Google and Android phones.

J.C. Penney mixed

A judge ruled Thursday that Martha Stewart violated the terms of her contract with Macy's when she agreed to design products for J.C. Penney.

The Plano, Texas-based retailer had planned to sell the designs under the "JCP Everyday" brand. Because the agreement was deemed a violation, those plans could run asunder.

But the company's bonds were mixed on the news, even when combined with comments made by shareholder Bill Ackman regarding former CEO Ron Johnson's mistakes.

A trader called the 7 1/8% notes due 2023 unchanged at 971/4, as the 7.4% notes due 2037 rose a deuce to 82.

Another market source called the 5.65% notes due 2020 down almost a point at 82 bid.

A third source placed the 7 1/8% notes at 97 bid, 97¼ offered, unchanged on the day. He also deemed the 7.4% notes up 2 points, seeing them trade at 82.

In a luncheon held in New York on Thursday, Ackman said that Johnson - whom he had hand-picked - was often not at the company's headquarters, as he lived in California. His absences were bad for morale, Ackman said.

Ackman also said Mike Ullman was the "right man at the right time" to take over the CEO position, which he held before Johnson was hired in 2011. Ackman had previously been very critical of Ullman's performance.

© 2015 Prospect News.
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