Edison debt loses power again; ResCap bonds end weaker, no news; Dex One bucks trend, ends up

By Stephanie N. Rotondo

Portland, Ore., March 5 - Distressed bonds were softer Monday, following the trend set by the equity markets.

A trader remarked that there were also several new high-yield deals that came to market during the session and "that coupled with the general heaviness [resulted] in stuff for sale."

Edison International Inc. paper was again active, but lower. The company had released poor earnings on Thursday, which had pushed the power company's debt downward by as much as 6 points. There was a bit of a rebound on Friday, however, and with no fresh news out on Monday, it was not clear what was driving Monday's declines.

Meanwhile, Residential Capital LLC bonds were also weaker. Like Edison, there was no fresh news to act as a catalyst.

But Dex One Corp. was managing to buck the general market trend, traders reported. The company's notes moved up as much as 3 points, according to one trader, following an earnings release on Friday.

Edison powers down again

Rosemead, Calif.-based Edison International saw its bonds weakening in line with the general market trend.

A trader saw the 7½% notes due 2013 opening around 82, trading all the way down to 75 and closing around 77. He also saw the 7 5/8% notes due 2027 around 56, a 21/2-point decline on the day.

Another trader said the 7½% notes were down 4 to 5 points at 75 bid, 76 offered.

There was no fresh news out, but the company did report earnings on Thursday.

For the fourth quarter of 2001, Edison posted a basic loss of $2.57 per share, versus profit of 51 cents per share the year before. Core earnings were 75 cents per share, compared to 58 cents per share in 2010.

The higher core earnings were attributed to better revenues at the company's Southern California Edison division.

For the year, basic losses came to 11 cents per share. The year before, the company reported earnings of $3.84 per share.

Core earnings for the year declined 7% to $3.22 per share.

ResCap paper weakens

Residential Capital's 9 5/8% notes due 2015 were "a point or so" lower, trading around "82-ish," according to a trader.

Another trader deemed the debt down over a point at 813/4.

Like Edison, there was no fresh news out on the money-losing mortgage lending unit of Ally Financial Inc. As previously reported, Ally is said to be looking for buyers for the business, but no word has been released as to the status of that hunt.

ResCap is based in Minneapolis.

Dex PIKs gain

A trader said Dex One's 12% notes due 2017 - a PIK issue - were trading up 2 to 3 points to 27.

He attributed the gains to the company's earnings release on Friday.

Another trader called the paper "up a scrap," also around the 27 mark.

In its earnings release Friday, the Cary, N.C.-based phonebook publisher said its fourth quarter and full-year results were consistent with its previous guidance and also noted that it was seeking amendments to its credit agreements that would allow for discounted buybacks of the company's bank debt.

Dex also said it was in a position to begin buying back its bonds at a discount.

As for its next coupon on the 12% PIKs, Dex is planning to "do a partial cash-partial PIK" payment, according to a trader.

Broad market bits

Elsewhere in the distressed marketplace, a trader said Clear Channel Communications Inc.'s 10¾% notes due 2016 were down 1½ points to 793/4.

Another trader called the issue down 2 to 3 points at 78.

The second trader added that Travelport LLC's 9 7/8% notes due 2014 "have been creeping up" in recent sessions, though on no news.

He saw the bonds firming a bit into the low-60s.

A third trader reported that Lehman Brothers Holdings Inc.'s benchmark 6 7/8% notes were strong again at 28¾ bid, 29 offered.

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