Distressed market ticks up; NII debt improves post-earnings; commodities remain under pressure

By Stephanie N. Rotondo

Phoenix, March 11 – Liquidity remained constrained in the distressed debt market during midweek trading, but there was some strength in the space.

Bankrupt NII Holdings Inc., for one, moved up “a couple points,” according to a trader. The gains came on the heels of the company’s earnings release late Tuesday.

The commodity arena, however, continued to be under pressure.

A trader said Cliffs Natural Resources Inc.’s 5.95% notes due 2018 – one of four issues that are currently the subject of a tender offer – slipped to an 80 to 81 context.

“Clearly all the bonds have been under pressure,” he said.

The iron ore producer announced the tender offer on Feb. 27. It is the second time the company has attempted such an exchange and the buzz is that the latest go-round is not faring well.

Meanwhile, Walter Energy Inc.’s debt was “a good bit weaker,” a trader said. He noted that there was news that the company had hired legal counsel to advise the coal company on a potential restructuring.

In the oil arena, Energy XXI Ltd.’s 3% convertible notes due 2018 fell 1.5 points to 36, even as the company’s stock rose 4.9 cents, or 1.49%, to $3.3999.

NII Holdings rises

NII Holdings’ bonds were moving up as investors reacted to the company’s latest quarterly results.

A trader said the 7 5/8% notes due 2021 were a couple points higher, ending at 32.

For the fourth quarter, the Reston, Va.-based provider of Nextel wireless services in Mexico and Latin America reported net subscriber additions of 129,000.

It was the first quarter the company has seen growth in subscriptions since the second quarter of 2013.

Consolidated operating revenues were $854 million and consolidated operating loss was $336 million.

Additionally, average monthly service revenue per subscriber was $25, down from $28 the previous quarter. Average monthly churn rate was 3.4%, unchanged from the third quarter.

For the year, the company saw a net loss of 61,000 subscribers. Operating revenues came to $3.7 billion and operating loss was $1.11 billion.

On Friday, the company announced that it had reached an agreement with a majority of creditors on a revised plan of reorganization.

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