Momentive debt stays under pressure post-filing; Caesars mixed; Walter to idle mines in Canada

By Stephanie N. Rotondo

Phoenix, April 15 - Distressed debt trading was subdued during Tuesday's session, due to the Passover holiday.

With it being a short holiday week - the markets are closed Friday - it is expected that things will get even more muted.

Momentive Performance Materials Inc. remained actively traded. The company filed for bankruptcy protections on Sunday and is expected to launch a $570 million debtor-in-possession facility on Thursday.

Meanwhile, Caesars Entertainment Corp. bonds were mixed, just one day after a company subsidiary priced a new $675 million deal.

And, Walter Energy Inc. paper was rising, even as the company said it was temporarily shuttering some of its Canadian operations.

Momentive debt remains weak

Momentive Performance Materials' bonds were lower again on Tuesday, following the company's bankruptcy filing on Sunday.

A trader said the 9% second-priority senior secured notes due 2021 were "down a couple points" at 76, while the 11½% notes due 2016 held in around 281/2.

Both of those issues are trading flat, or without accrued interest.

However, the 8 7/8% first-priority senior secured notes due 2020 - an issue that is not trading flat - were fairly steady at 108 1/2.

"They're the better ones," the trader said. "They're off just a little."

A second market source placed the 9% notes around 75 5/8.

With assets of $2.69 billion and debt of $4.17 billion, the specialty chemicals manufacturer has not posted a profit since its 2006 leveraged buyout by Apollo Global Management LLC.

The debt incurred in the LBO made the company especially susceptible to market fluctuations.

The company hopes to eliminate as much as $3 billion of debt via the bankruptcy court.

Albany, N.Y.-based Momentive is scheduled to launch a $570 million DIP facility on Thursday. JPMorgan Securities LLC is the lead arranger.

Caesars mixed

Caesars Entertainment debt was trading in mixed fashion during the day's session.

A trader saw the 12¾% notes due 2018 falling a deuce to 511/4, while the 10% notes due 2018 lost a point to 45. But the 10¾% notes due 2016 inched up a point to 881/4.

Another source saw the new issue at 99¾ bid, 100 1/8 offered.

As for the new $675 million of 9 3/8% second-priority senior secured notes due 2022 from Caesars Growth Properties LLC, they were ticking higher in a par ¼ to par ½ context.

The new issue priced Monday. Proceeds will be used by the unit to purchase four properties from the operating company.

Walter to idle mines

Walter Energy's 9 7/8% notes due 2020 moved up, even as the company said it was idling its British Columbia mines.

A trader called the issue up 2 points at 671/2.

Due to the idling, Walter is expecting to temporarily lay off about 695 employees. It is expected that second-quarter earnings will reflect a $7 million severance charge due to the closure.

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