Nokia posts wider loss, bonds rise anyway; uphill march for Patriot continues; Exide debt dips

By Stephanie N. Rotondo

Phoenix, July 19 - Distressed debt was once again on the stronger side Thursday, traders reported.

"The market was pretty strong," one trader noted. "There were tons of offer wanted again."

Another trader also said the distressed arena was stronger, though he added that there was a heavy focus on new high-yield issues.

Nokia Corp. paper got a boost after reporting its second-quarter earnings. Despite a significantly wider loss, better-than-expected sales helped push up the bonds.

Patriot Coal Corp. was also firmer again, though trading was thin.

There were some soft spots in the market, however; Exide Technologies Inc.'s notes dipped slightly, after running up in the previous session.

Nokia rises despite earnings

Nokia bonds were heading higher Thursday following the release of the company's second-quarter financial report.

A trader said the 5 3/8% notes due 2019 gained a deuce to end around 76, while the 5 5/8% notes due 2039 earned "almost 2 [points]" to close at 74 5/8.

Another trader also saw the 5 3/8% notes inching up to around 76.

Nokia reported a €1.41 billion net loss in the second quarter, compared to a loss of €368 million in the year-ago quarter. Sales dropped 19% to €7.54 billion.

Though sales were down massively, they beat expectations of €7.36 billion.

Smartphone sales were blamed for the decline, as sales in that sector dropped 34% to €1.54 billion. Sales of lower-end phones, however, buoyed the slipping results.

Total number of phones shipped during the quarter was 84 million, better than the expected 80 million.

More strength for Patriot

Patriot Coal was again on the gainer list, traders said, as the paper moved up about 3 points during the session.

One trader said the 8¼% notes due 2018 rose 3¼ points to around 50.

"There was only one trade, so it's hard to say," he noted.

A second trader also pegged the notes around the 50 mark, as did a third market source that called the notes up 3 points.

Alpha Natural Resources Inc.'s 6¼% notes due 2021 were also on the rise, moving up 2 points to 863/4, according to a market source.

Among other energy related names, Venezuelan-based state-owned oil company Petroleos de Venezuela SA saw its debt dip, albeit in heavy trading.

A trader said about $45 million of 9% notes due 2021 changed hands, which fell half a point to 771/4. About $30 million of the 8½% notes due 2017 traded, slipping slightly to 85.

On Thursday, PDVSA inked a $2 billion investment deal with Chevron aimed at increasing production at a joint oilfield.

PDVSA said the financing should last until 2025.

Exide gives up gains

A trader said Exide Technologies' 8 5/8% notes due 2018 were giving up some gains from the previous session.

"Everybody and their brother wanted Exide yesterday," he commented, which had pushed paper up to levels around 84.

Come Thursday, the notes were trading at 83 bid, 83½ offered, then fell off to 82. By the close, the debt had recovered some, ending at 82 5/8, on about $23 million traded.

Exide is a Milton, Ga.-based battery manufacturer.

Broad market stays firm

In the rest of the distressed realm, J.C. Penney Co., Inc.'s 5¾% notes due 2018 were "under pressure," according to a trader.

He saw the notes drop half a point to 851/2.

Another trader saw NewPage Corp.'s 11 3/8% first-lien notes due 2014 closing at 701/4, which he said was unchanged to "down a touch."

Eastman Kodak Co.'s bonds were meantime stronger, with the 9¾% second-lien notes due 2018 gaining 2 to 3 points to 74 and the 7¼% notes due 2013 up "a point and change" to 20.

The trader said there is an upcoming hearing for the bankrupt coming that "people are getting excited about."

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