Distressed market starts week strong; Caesars to launch online poker, bonds higher; Verso pops

By Stephanie N. Rotondo

Phoenix, Sept. 16 - Distressed bonds "felt good" as the week got started off, a trader reported.

Another trader said there was "not much" on the down side.

New issues still remained a major focus but fresh news was stirring things up in the distressed world.

Caesars Entertainment Corp. announced on Monday that it would launch a real-money online poker website on Thursday. The news gave the casino operator's bonds a shot in the arm.

Meanwhile, Verso Paper Corp.'s debt was active and better by as much as 3 points on the day. However, traders said they had seen no reason for the move.

Overall, the markets were all on the positive side, as Larry Summers withdrew his name for consideration to take Federal Reserve Chairman Ben Bernanke's post. With Summers out, Janet Yellen has been proclaimed the frontrunner and it is believed her ideas on how to taper the central bank's stimulus program would be easier on the economy.

Caesars to launch online gaming

Caesars' bonds got a boost on Monday after the Las Vegas-based company said it would launch an online poker website that uses real money on Thursday.

One trader said the 10% notes due 2018 were the day's "top trader" in all of the high-yield space, with "over 30 trades." The paper was up about a point at 63 5/8.

The trader also saw the 8½% notes due 2020 gaining nearly 1½ points to end at 97, while the 11¼% notes due 2017 climbed up half a point to 105.

Another market source pegged the 10% notes at 63¾ bid, up over a point.

At another desk, a trader said the 10% notes were up "about a point and change" at 631/2.

"They were up a bunch on Friday," he said. "So they continued to rally a little bit more."

The online gaming system will only be operated in Nevada, as the state legalized online gambling in February. Caesars also hopes to start a similar site in New Jersey later this year.

Caesars intends to market the game under the World Series of Poker brand.

Verso Paper rises

Memphis-based papermaker Verso saw its bonds jumping on Monday, though there was no fresh news to act as a catalyst.

A trader called the 11¾% notes due 2019 up 3 points at 661/2. Another trader pegged the issue in a 66 to 66½ context, also deeming that up 3 points.

The second trader also saw the 8¾% notes due 2019 closing around 34½ to 35, which compared to previous trades around 32.

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