Distressed debt steady after return from long holiday weekend; NII still rallying; Genco files

By Stephanie N. Rotondo

Phoenix, April 21 - The distressed bond market was fairly unchanged after the long post-holiday weekend, but with some desks still empty, volume was limited, according to traders.

One trader noted that most of Europe was also closed for the day and that the Boston Marathon was going on.

NII Holdings Inc.'s bonds "continued to creep up," a trader said, seeing the 10% notes due 2016 and the 7 5/8% notes due 2021 gaining half a point to 38 and 28, respectively.

Genco Shipping & Trading Ltd. announced it had filed for bankruptcy Monday, due to weak charter rates. But a trader said there was "no real activity" in the company's 5% convertible notes due 2015.

He pegged the notes in a 96 to 98 context in odd-lot trading. Another market source placed the issue in a 95 to 96 range, which compared with 94-95 previously.

The stock (NYSE: GNK) was unchanged at $1.70.

The dry-bulk shipping company listed assets of $2.4 billion and debt of $1.5 billion.

And a trader said Momentive Performance Materials Inc. continued to be talked about as investors try to figure out what will occur under bankruptcy proceedings.

"They're still talked about, but there isn't a lot of trading," the trader said, seeing the 9% notes due 2021 holding around 75.

Visant hit as merger stalls

Visant Holdings Corp.'s 10% notes due 2017 took a hit after the Federal Trade Commission recommended a merger be blocked between Jostens Inc. - owned by Visant - and American Achievement Group Holding Corp.

One trader called the issue down 7 to 8 points at 93 bid, 94 offered. Another market source placed the notes in a 93 to 95 context, versus 100 7/8 to 101 previously.

A third source saw the bonds dropping 7-plus points to 931/2.

The $486 million merger was originally announced in November and had been expected to close in July, assuming all regulatory hoops were jumped through. But the FTC on Thursday said it was seeking a court order to block the merger, alleging that it would have hurt the class ring-buyers market.

"A combination of two of the three leading manufacturers would have led to higher prices and lower quality for the students and their parents who purchase these rings," Debora Feinstein, bureau of competition director, said in a news release.

Due to the FTC's ruling, the parties of the merger agreement have agreed to terminate the offer.

No termination fee will be paid.

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