NII Holdings debt gains despite swing to loss; Exide paper begins to rebound; Kodak firm again

By Stephanie N. Rotondo

Phoenix, May 2 - It was another firm day for distressed bonds on Thursday.

"Everything continued strong; there was not much in the world of decliners," one trader said.

However, another trader remarked that a large portion of the day's activity was centered on new high-yield issues.

NII Holdings Inc. was "very active," however, as the company reported a loss for the first quarter of 2013. The bonds were better on the day, despite the earnings having missed estimates.

Meanwhile, Exide Technologies Inc.'s paper "started to rebound," according to a trader. The debt had dropped massively in the previous week following news of a battery recycling plant that was shuttered by state regulators due to a hazardous waste leak.

NII rises despite loss

Reston, Va.-based NII Holdings - also known as Nextel International Inc. - saw its bonds climbing higher, even as the company reported a wider-than-expected loss.

A trader said the 7 5/8% notes due 2022 were the day's most actively traded securities, seeing the debt up 1½ points to end around 90. The 8 7/8% notes due 2018 meantime put on a point, closing around 951/2.

Another trader said the name was "pretty active," pegging the 7 5/8% notes around 90 and the 8 5/8% notes around 95.

He called both issues up about a point.

For the quarter, NII posted a net loss of $207.5 million, or $1.21 a share, versus a year-earlier profit of $13.6 million, or 8 cents a share. The results were due in part to higher operating expenses as the company looks to expand its 3G networks in Mexico and Brazil as well as to $230 million of impairment and restructuring charges.

Revenues dropped 13% to $1.41 billion. Operating expenses rose 4.6% to $1.52 billion.

Analysts had been expecting a loss of 65 cents per share on revenues of $1.46 billion.

Subscriptions to the company's Nextel mobile phone service increased by 152,000 during the quarter. Cancellations, or churn, came to 2.59%, compared to 2.07% a year ago.

Exide attempts recovery

Exide Technologies' 8 5/8% notes due 2018 were rallying after getting clobbered last week after a regulator shutdown of a battery recycling plant in California.

A trader said the bonds were up 1 3/8 points at 68 bid. Another trader also placed the issue around 68.

The Vernon, Calif.-based plant was closed mid-last week after it was found to be leaking hazardous wastes that included arsenic emissions for some time, regulators said, due to a degraded pipeline.

The leak is not the first violation the facility has ever had. But state government officials have allowed the plant to operate on an "interim basis," despite repeated violations that include lead contamination and groundwater contamination.

Exide is a Milton, Ga.-based battery maker.

Kodak stays firm

Eastman Kodak Co. debt continued to gain strength just one day after the company filed its official plan of reorganization.

A trader said the second-lien "stubs" moved up to levels around 101, while the 7% notes due 2017 and the 7¼% notes due 2013 inched up to 21 bid, 22 offered.

Under the terms of the reorganization plan, second-lien noteholders will receive 85% of new equity upon the emergence from bankruptcy. Other unsecured creditors, including the company's U.S. retirees, will receive the remaining 15% of equity.

Current equity holders will see their securities canceled.

The Rochester, N.Y. hopes to exit bankruptcy in the third quarter, pending court approval of the plan.

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