NII Holdings climbs on asset sale news; Colt Defense posts gains, bonds rise; J.C. Penney busy

By Stephanie N. Rotondo

Phoenix, Aug. 9 - There was "very small volume" in the distressed debt market on Friday, a trader said, and most investors were focusing on the week's new high-yield issues.

However, some names were being driven by news.

NII Holdings Inc., for instance, was actively trading higher on word it had inked a sale agreement with American Tower Corp. for its towers in Mexico and Brazil. The asset sale is part of the company's turnaround plan, as it looks to focus on its core markets in Latin America.

Meanwhile, Colt Defense LLC reported a swing to profit for the second quarter. The bonds were seen up as much as 2 points.

And J.C. Penney Co. Inc. was "obviously still one of the more notable ones," a trader said. The bonds were steady to slightly better in the final trading session of the week, as investors wondered what a new search for a chief executive officer might bring.

NII boosted by asset sale

NII Holdings' debt was getting a boost after the market learned it was selling some of its towers in Brazil and Mexico to American Tower Corp.

The sale price is $811 million.

A trader saw both the 8 7/8% notes due 2019 and the 7 5/8% notes due 2021 rising a deuce to 88 and 791/2, respectively. He also pegged the 10% notes due 2016 at par, up over a point.

Another trader placed the 7 5/8% notes at 79 bid, 79½ offered, down from the intraday high around 81, but "still up on the day."

The 10% notes hit highs around 102, he said, but "settled back in" to par ½ bid, 101 offered.

According to the terms of the sale agreement, NII Holdings' units in Brazil and Mexico will lease back the towers for 12 years.

The sale price fell toward the lower end of Wells Fargo & Co.'s estimate of $800 million to $900 million.

Still, the new cash will help the Reston, Va.-based provider of Nextel mobile technology in Latin America with more liquidity as it attempts to turnaround it business.

Colt up on earnings

Colt Defense bonds were gaining ground after the firearms manufacturer posted quarterly results.

One trader called the 8¾% notes due 2017 up 2 points to 83. Another said the debt was "up a couple points," at 82 bid, 83 offered.

For the quarter, Colt reported a profit of $4.16 million, compared to a loss of $6.24 million the year before. Sales improved to $64.24 million from $45.84 million.

In July, the company completed a merger with New Colt Holding Corp. the parent company of Colt's former manufacturing subsidiary Colt's Manufacturing Co. LLC.

J.C. Penney stays busy

J.C. Penney remained a notable name in Friday trading, just one day after it was reported that activist investor Bill Ackman was calling for a quick turnaround on a search for a new chief executive officer.

One trader said the name "continues to slide," seeing the 5.65% notes due 2020 fall to a low of 69 before rebounding to 693/4.

He called that about unchanged on the day.

Another trader pegged the issue in the 69 to 70 range, noting that the 2020 paper was the most active of the J.C. Penney structure.

The first trader meantime pegged the 6 7/8% notes due 2015 at 891/2, up about a point. The second trader said the paper "rebounded a little" to 89½ bid, 90 offered.

According to a report from CNBC on Thursday, the Plano, Texas-based company's board of directors agreed to look into possible replacements for Ullman during a July meeting. The search was initially proposed by activist investor Bill Ackman. Ackman had previously championed Johnson, who originally took over for Ullman in 2011.

Ackman wants a new CEO named within 45 days.

Ackman said in a letter that former CEO Allen Questrom had agreed to come back to the company as chairman, as long as he agreed with the new choice for CEO.

MolyCorp stressed

A trader said MolyCorp Inc. was "a name with too much stress."

The mining company posted a loss of $71.2 million, or 44 cents per share, late Thursday.

The loss was wider than the previous year - at $67.7 million - but the loss per share narrowed, due to an issuance of additional stock.

Revenues improved 31% to $136.9 million.

Analysts polled by Thomson Reuters were expecting a loss of 23 cents per share on revenues of $158 million.

The trader said that on Aug. 1, MolyCorp.'s 6% convertible notes due 2017 were trading around 84. On Friday, the issue was pegged at 77 bid, 77.25 offered.

The stock dropped 72 cents, or 9.72%, to $6.69.

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