Looming holiday creates muted climate; OPTI bonds weaken again; Nebraska Book paper gains

By Stephanie N. Rotondo

Portland, Ore., Jan. 14 - A trader in the distressed debt market called Friday's session "kind of a shrug" as another saw a lot of empty desks.

"There was a half-day mood," the second trader said, referring to the days when half-days before holidays - like Martin Luther King Jr. Day on Monday - were the norm. The first trader noted that even with the massive amount of new deals that came over the course of the week, activity was light.

OPTI Canada Inc., however, was one of the day's more active traders. The bonds - which have been seesawing in an about 2-point range for a while - lost about 1 to 2 points in trading. On Wednesday, the company released an update on its Long Lake project.

Meanwhile, Nebraska Book Co. continued to generate interest, though there has been nothing to act as catalyst. The company's debt had fallen as much as 5 points on Thursday but managed to regain a little bit of ground on Friday.

In the gaming realm, Harrah's Entertainment Inc. - now known as Caesar's Entertainment Inc. - was seen as an active credit, though in terms of price, there was little movement.

OPTI gyrations continue

OPTI Canada debt continued to seesaw, this time losing ground during Friday's session, traders said.

One trader called the 8¼% notes due 2014 about 2 points softer at around 70.

"They've been bouncing between 70 and 72," he said.

Another trader also saw a 70 bid for the paper but deemed it down only 1 point. The 7 7/8% notes due 2014 meantime lost just over a point, he said, to close at 693/4.

Earlier in the week, OPTI said production at its Long Lake joint venture oil sands project - Nexen Inc. is the partner, owning 65% - increased by 11% in December to 29,100 barrels per day. However, even with the gains, production was still well below its 72,000 barrels per day capacity.

In November, OPTI said its financial stability hinged on increasing capacity at Long Lake. Nexen estimated that production will average between 38,000 and 45,000 barrels per day in 2011.

OPTI Canada is based in Calgary, Alta.

Nebraska Book regains ground

A trader said Nebraska Book bonds gained a little bit of what it lost in the previous session, pegging the 8 5/8% notes due 2012 at 861/4.

"They've been active for some reason lately," he said.

Another trader said most of the trades in the notes were between 86¼ and 861/2. He noted that the market was "probably" 85 bid, 87 offered, which compared to 84 bid, 86 offered on Thursday.

Traders said Thursday that the notes had lost as much as 5 points on the day, though there was no news out to explain the decline.

The textbook seller is based in Lincoln, Neb.

Sorenson picks up steam

Also inexplicably active of late is Sorenson Communications Inc.

A trader said that he had been seeing more trading in the 10½% notes due 2015 than he had in the recent past, pegging the bonds at 68 bid, 70 offered, up from their recent levels.

"They went silent for a while," he noted, only starting to trade again this week. He saw the bonds "up a couple of points" from quoted levels on Thursday in the 67-68 area.

"There was some trading in it, but it just seemed to be just a few different places," he said.

The trader saw no news out about the Salt Lake City-based company, which provides technology and services that allow hearing-impaired people to use telephone service by means of the company's videophone products.

Sorenson's bonds had been fairly active last fall, trading around the upper 50s to lower 60s, but then disappeared off the radar screens. The trader said the fact that the secured deal was a Rule 144A made it difficult to follow since it would not show up on Trace.

Harrah's active but steady

Harrah's Entertainment/Caesar's Entertainment's 10% notes due 2018 were "active again," a trader said, though he couldn't explain why.

"I don't know why they are so active; they don't move," he said.

He placed the bonds at 903/4, which he deemed up marginally.

Another trader echoed that level, but he called them "virtually unchanged."

Harrah's is a Las Vegas-based casino operator.

Paul Deckelman contributed to this article

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