Quicksilver Resources bonds take nosedive; MolyCorp still notable, unchanged; Nortel holds in

By Stephanie N. Rotondo

Phoenix, Aug. 8 – Quicksilver Resources Inc. was a big loser in the distressed debt market in an otherwise unchanged day.

A trader said the name “has been getting hit since numbers came out” on Tuesday. “Somebody was puking them out today.”

He saw the 9 1/8% notes due 2019 falling 5 points to 80, while the 7 1/8% notes due 2016 declined 7 points to 73.

Another market source pegged the 9 1/8% notes at 80 bid, 80½ offered, which compared to 85 bid, 85¼ offered previously. The 7 1/8% notes were placed around 73 versus prior levels around 80.

For the quarter, the oil and natural gas driller reported earnings per share of 7 cents, which came in line with analysts’ expectations. But revenue fell nearly 10% to $107 million.

Elsewhere in the mining space, MolyCorp Inc.’s 10% notes due 2020 finished the day “about in line, maybe a smidge lower” than Thursday’s close, a trader said.

He saw the issue in an 86½ to 87 context.

MolyCorp, a rare earth minerals and metals mining company, has been notable for most of the week as the company said Wednesday that it had secured $400 million in financing from Oaktree Capital Management LP.

Nortel judge seeks mediation

A trader said Nortel Networks Corp. was in the news, as the judge overseeing the company’s U.S. bankruptcy case indicated he might pressure creditors to settle in regards to how to pay out $7 billion.

However, the bonds were “in the same range they’ve been,” the trader said, seeing the 10¾% notes due 2016 in a range of 117 to 117½.

At another desk, the 10¾% notes were placed at 117½ bid, 118 offered, mostly in line with previous levels. The 10 1/8% notes that were to have matured in 2013 were also in line, trading with a 116 handle.

On Friday, U.S. Bankruptcy Judge Kevin Gross told U.S. creditors and a monitor for the company’s Canadian bankruptcy case that he wanted the parties to sit and discuss how $7 billion might be split among creditors in the U.S., Canada and the United Kingdom. While Gross said he would not consider the meeting to be a formal mediation session, “I am going to provide some direction and perhaps some pressure.”

Gross noted that a recent proposal to cap interest payments to U.S. bondholders at just over $1 billion was a “significant movement,” but believed that there was more that could be settled.

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