Clear Channel plans LBO debt swap, bonds rise; broad market stays firm, focused on new issues

By Stephanie N. Rotondo

Phoenix, May 21 - Clear Channel Communications Inc. was the nom du jour in the distressed debt market on Tuesday, as the company announced a tender offer for the LBO bonds.

The debt rose as much as 4 points on the news, moving north of par.

Aside from the "tremendous amount of focus on new issue stuff," as one trader put it, the distressed space was mostly positive for the day.

Aurora Diagnostics Inc.'s 10¾% notes due 2018 put on 3 points, according to a trader, after being on the softer side following an earnings release last week.

The trader pegged the issue at 681/2.

Another trader said J.C. Penney Co. Inc.'s longer-dated issues "keep creeping up."

He saw the 6 3/8% notes due 2036 hit a high of 87, leaving them 86½ bid, 87 offered.

On the down side, Desarrolladora Homex SAB de CV's 9½% notes due 2019 ended down 5 points at 41, a trader said. However, the paper had hit a low tick of 36 and managed to recoup some ground.

"They just can't get of their own way," the trader said of the Mexican homebuilding industry.

Clear Channel plans exchange

Clear Channel Communications announced that it was tendering for its 10¾% senior cash pay and 11%/11¾% senior toggle notes due 2016 on Tuesday.

The news gave the bonds as much as a 4-point boost. The debt had been climbing up recently, on chatter that there was some sort of deal in the works for the LBO paper.

One trader called the 10¾% notes unchanged at 1011/4, while the 11% notes gained over 3½ points to end at 101.

The trader also saw the 9% notes due 2021 at 1033/4, up 1¾ points.

At another desk, a trader deemed the LBO issues up 4 points, with both the 10¾% and 11% notes trading around 101.

The San Antonio-based multimedia company said that holders of at least $500 million of the notes have already agreed to participate in the tender. Participants will receive 14% senior notes due 2021 in exchange for their holdings.

The tender deadline is 11:59 p.m. ET on June 18.

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