NII bonds not much moved ahead of new issue; Clear Channel LBO debt soars; J.C. Penney steady

By Stephanie N. Rotondo

Phoenix, May 16 - New issues were again taking over the high-yield bond market on Thursday, leaving little goings-on for the distressed debt space.

"It's all new issues," one trader said of the day's activity.

"New issues galore," said another trader.

NII Holdings Inc. brought a new deal during the session, coming upsized at $750 million from $500 million. However, the company's existing debt was little moved ahead of the deal's pricing.

Meanwhile, Clear Channel Communications Inc.'s LBO bonds remained active. A trader said that the word on the street was that the company's recent amend and extend effort on $1.5 billion in term loans could end up being larger than expected.

And, there wasn't much action in J.C. Penney Co. Inc.'s debt ahead of its after-market earnings release. A trader said the bonds were holding steady before the results came out.

The retailer ended up reporting a wider-than-expected loss for the first quarter.

NII unfazed by new issue

NII Holdings' new $750 million bond issue didn't do much to affect the Reston, Va.-based company's existing debt, according to a trader.

"It was trading some," he said, seeing the 7 5/8% notes due 2021 "around 90, so not that changed."

The trader also saw the 11 3/8% notes due 2019 at 1141/2, which was down from 115.

The provider of Nextel mobile service in Latin America priced the new issue at par to yield 7 7/8%. Price talk was initially around 8% and the size was expected to be around $500 million.

Proceeds from the offering are being used to repay local level debt in Brazil and Mexico.

Clear Channel gains steam

Clear Channel Communications' LBO debt continued to gain momentum Thursday due to rumors surrounding the company's recent amend and extend effort.

A trader called the 11% and 10¾% notes due 2016 up 4 to 5 points, at 97 and 961/2, respectively.

"There's talk that the amend and extend will be much bigger than expected," the trader said. Chatter is that it will be for $4 billion instead of $1.5 billion.

Another market source pegged the 11% notes at 97 and the 9% notes due 2021 at 101.

On May 9, the San Antonio-based multimedia company said it was seeking approval to amend and extend the maturity on $1.5 billion of its outstanding term loan B and C. The company wanted to push out the maturity to 2018.

J.C. Penney quiet pre-earnings

A trader said there was "not a lot of trading" leading up to J.C. Penney's post-market close earnings release.

He deemed the 7.65% notes due 2016 "about unchanged" at 101½ bid, 101¾ offered.

The quarterly results showed a wider-than-expected loss, with the company posting a net loss of $348 million, or $1.58 per share.

Various analyst polls had placed the loss somewhere between 43 cents per share and $1.06 per share.

Revenue fall 16.4% to $2.64 billion and same-store sales dropped $16.6%.

The first quarter results came just about a month after the struggling Plano, Texas-based replaced Ron Johnson as chief executive with his predecessor, Mike Ullman. Johnson was ousted as his turnaround effort failed to do much but burn through cash.

Distressed space strong

In other distressed names, a trader said AMR Corp.'s bonds - like the 9% notes due 2012 - were inching up to end at 119.

Ahern Rentals Inc.'s 9¼% notes due 2013 meantime rose to par in Thursday trading.

The 12% PIK notes due 2017 linked to the former Dex One Corp. meantime "continued to go up," a trader said, quoting the issue at 58 bid, 60 offered.

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