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Verso Paper climbs as NewPage sells mills; investors continue to react to coal earnings
By Stephanie N. Rotondo
Phoenix, Oct. 31 – Verso Paper Corp. was the distressed debt market’s notable name Friday, as the company said it was shedding some assets in order to move its merger with NewPage Corp. forward.
On the news, the bonds improved dramatically.
Elsewhere in the distressed realm, coal names continued to move about as investors reacted to a week of earnings from the depressed sector.
Walter Energy Inc.’s 9 7/8% notes due 2020 held steady at 29¼, while the 9½% first-lien notes due 2019 rose half a point to 87, according to one trader.
In its Thursday earnings release, Walter reported a third-quarter net loss of $98.9 million, or $1.48 per share. That compared to a loss of $100.7 million, or $1.61 per share the year before.
But Alpha Natural Resources Inc.’s debt was mixed, as a trader saw the 6¼% notes due 2021 holding at 46, though the 6% notes due 2019 fell nearly 2½ points to 49¾.
Like Walter, Alpha Natural’s earnings – also out Thursday – beat expectations.
Over in Arch Coal Inc. paper, the 7% notes due 2019 were seen up almost 2 points to 42¼.
Arch reported numbers on Tuesday. In the latest quarter, revenues fell to $742.2 million from $791.3 million in the year-earlier period.
And, in Cliffs Natural Resources Inc. bonds, the 6¼% notes due 2040 were deemed “up almost 5 points” to 74, according to a trader.
Cliffs earnings came out late Monday. For the third quarter, Cliffs reported a net loss of $5.88 billion, or $38.49 per share. The loss was much wider than the previous year, due to a $5.7 billion write-down of its coal and iron ore assets.
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