NII Holdings debt 'flying'; James River Coal paper treks onto higher terrain; Alcatel bonds up

By Stephanie N. Rotondo

Phoenix, Aug. 16 - It was a "kind of mixed" day for distressed debt, a trader reported Thursday.

"It was maybe slightly better on most things," he said. "There's been some pressure on some stuff."

NII Holdings Inc. paper was "flying," a trader said, though there was no news to act as a catalyst. Longer-dated issues were up 3 points on the day, with shorter maturities gaining nearly a deuce.

James River Coal Corp. was also on the rise. The coal producer's debt has been moving upward of late, since reporting its second-quarter results.

Also on the uptick was Alcatel-Lucent SA's debt. As with NII Holdings and James River, there was no fresh news to move the bonds.

On the downside was ATP Oil & Gas Corp., the Houston-based offshore oil producer that it expected to soon file for Chapter 11 protections. There was news in that name, including word of a lawsuit from Macquarie Investments LLC for failure to pay royalties.

NII Holdings takes flight

Reston, Va.-based NII Holdings saw its bonds "flying" during Thursday trading, according to a trader.

He called the 8 7/8% notes due 2019 gaining 3 points to 811/4. The 7 5/8% notes due 2021 were likewise up 3 points at 76.

The 10% notes due 2016 earned nearly 2 points, ending at 981/2.

There was no fresh news out on the wireless telecommunications provider focused on Latin America.

James River steadily climbing

A trader said that James River Coal's 7 7/8% notes due 2019 "continued to move higher" during Thursday trading.

He deemed the issue "up another 2 points at 59 bid, 61 offered, noting that the paper had been trading in the low-50s a week ago.

Last week, the Richmond, Va.-based coal mining company reported second-quarter financials that beat analyst expectations.

For the quarter, James River posted a net loss of $25.8 million, or 74 cents per share. Analysts had been expecting a loss of 78 cents per share.

James River was also reaping rewards from its ability to sell its metallurgical coal at higher prices than its competitors.

During its conference call discussing the results, management opined that the coal sector was beginning to make moves toward a recovery, as the industry has been beaten down with declining demand and lower prices for other fuels.

Alcatel inches higher

French wireless telecommunications equipment company Alcatel-Lucent saw its debt rising during the session, though on no particular news.

A trader called the 6.45% notes due 2029 up over half a point at 62. Another market source also pegged the issue at 62 bid, up nearly a point.

Earlier in the week, Standard & Poor's revised its outlook on the company to negative, based on the belief that cash flow losses will continue throughout 2013.

ATP loses its grip

ATP Oil & Gas' 11 7/8% notes due 2015 dropped 4 points on the day to 291/2, according to a trader.

The market has been waiting for a bankruptcy filing from the oil exploration company, after it was reported last week that it was lining up a debtor-in-possession facility from Credit Suisse Group AG. The filing has yet to come, however, and one market source recently speculated to Prospect News that the company is likely in talks with potential buyers and creditors in an effort to not file for Chapter 11.

The potential filing comes ahead of an $89 million coupon payment due in November, which many believe the company will not be able to pay.

Bloomberg further reported Thursday that Macquarie Investments has recently filed a lawsuit against the company, alleging a failure to make royalty payments on operations conducted on Outer Continental Shelf leases in the Gulf of Mexico.

Momentive, Caesars fall

Among other distressed bonds, Momentive Performance Chemicals Inc.'s 11½% notes due 2016 declined 5 points to 56, according to a trader.

Caesars Entertainment Corp.'s 10% and 12¾% notes due 2018 were also weaker, falling a point to 64 and 70, respectively.

The Las Vegas-based casino operator priced an add-on to its 8½% notes on Wednesday.

"[New issues] always kind of drives [bonds] down a little," a trader said.

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