Clear Channel boosted by 'speculation,' trader says; TXU rises; Homex gives back recent gains

By Stephanie N. Rotondo

Phoenix, April 23 - The distressed debt market was generally better as the broader market put on a few during Tuesday trading.

Clear Channel Communications Inc. paper firmed 2 to 3 points on the day, traders reported. However, one trader said the gains were based on "speculation, nothing definitive."

Meanwhile, Energy Future Holdings Corp.'s Texas Competitive Electric Holdings Co. LLC debt continued to rise, even as the market waited for word on whether the company would be able to reach a prepackaged bankruptcy agreement with creditors.

In emerging markets, Mexican homebuilder Desarrolladora Homex SAB gave back some of the gains it earned last week on news of an asset sale.

"Those guys are volatile," a trader said.

Clear Channel gets a boost

Clear Channel Communications' 11% notes due 2016 saw "pretty heavy volume," a trader said Tuesday, seeing the bonds moving up to 86¼ from 83.

The trader also saw the 10¾% notes due 2016 up 3 points at 84, though that was down a point form the intraday high.

Another trader called the issue up 2 to 3 points, the 11% notes at 86 and the 10¾% notes at 84.

Chatter was that the San Antonio-based multimedia company had been engaging in talks with certain holders of its LBO bonds. But a trader wondered about the validity of the reports and called it merely "speculation, nothing definitive."

TXU paper powering up

Energy Future's Texas Competitive Electric debt experienced a "big percentage move," according to a trader.

The trader saw the 15% notes due 2021 up nearly 2½ points, ending around 28.

Another trader said the issue opened at 26 bid and went out 28 bid.

On April 15, the Dallas-based power producer said in a regulatory filing that it had proposed a prepackaged bankruptcy plan to certain creditors regarding its Texas Competitive unit. Negotiations on the proposal began, but ended without any agreement being inked. Energy Future said in the filing that as it stood, the talks would not be ongoing.

In other energy names, Ameren Energy Generating Co.'s bonds were stronger, a trader reported.

He pegged the 7% notes due 2018 at 851/2, the 6.3% notes due 2020 at 76½ and the 7.95% notes due 2032 at 751/2.

Homex remains volatile

Mexican homebuilder Homex was on the downside yet again Tuesday, losing nearly half of what the debt had put on Friday on news of an asset sale.

A trader called the 9¾% notes due 2020 off by 9 points, seeing the paper close around 70. The 9½% notes due 2019 were down 6 points at 74, while the 7½% notes due 2015 were nearly 5½ points softer at 77 5/8.

"Those guys are volatile," the trader said.

On Friday, Homex said it was selling its stake in federal penitentiaries located in Mexico to billionaire investor Carlos Slim and his Ideal and Grupo Financiero Inbursa SAB for about $326 million. Homex, and the sector at large, has been struggling to maintain cash flows as the government has moved to supporting more multi-family dwellings, rather than single-family units.

News of the asset sale had given the bonds a 20-point pop.

Broad market firms

Elsewhere in the distressed space, a trader saw NII Holdings Inc.'s 7 5/8% notes due 2021 inching up half a point to 821/2.

The trader also saw Exide Technologies Inc.'s 8 7/8% notes due 2018 rising 1½ points to 791/4.

Another trader also placed the debt around the 79 mark.

On the down side, Caesars Entertainment Corp.'s 10% notes due 2018 dipped almost a point, ending around 64.

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