Distressed market ends week unchanged; OPTI trading 'more than normal'; Chemtura gets a boost

By Stephanie N. Rotondo

Portland, Ore., Oct. 22 - Distressed debt ended Friday's session "mostly unchanged," according to a trader.

However, trading was mostly in "five-B names," he added.

"It was a very different day than I would have expected," another trader remarked. "Not enough happening."

OPTI Canada Inc.'s bonds dipped about a point during the final trading day of the week, though there was no news to cause the decline. A trader noted that volume in the credit was "more than normal."

Chemtura Corp. debt meantime got a 10-plus point boost after a bankruptcy court approved the company's plan of reorganization.

Elsewhere, a trader said Blockbuster Inc.'s notes were finally trading at levels they are worth, as the debt slipped to a penny. The currently bankrupt company is reportedly facing a fight with stockholders over who will get control of the company once it exits Chapter 11 protections.

Trading in NewPage Corp. died down yet again this week, according to market sources. But a trader said the bonds were "catching a little bit of a bid."

OPTI trading surges

There was "more than normal" trading in OPTI Canada bonds, though there wasn't any news to speak of that could have caused the surge.

"It was the one stand out to the downside," a trader said, "given that everything else was better."

He quoted the 2014 paper at 70 bid, 71 offered, "down another point."

Another source pegged the 7 7/8% notes due 2014 at 70 bid, 70½ offered and the 8¼% notes due 2014 at 70½ bid, 71½ offered. For the former, that compared to last round-lot levels around 73 bid, 74 offered and for the latter, that compared with levels around 72 previously.

The Calgary-based oil sands producer will release its quarterly report next week.

Plan OK boosts Chemtura

Chemtura's debt closed "up a good bit," a trader said, as the company's plan of reorganization was confirmed.

The trader said the 6 7/8% notes due 2016 ended in the high-120s, about 128 bid, 130 offered.

At another desk, the 2016 paper was called about 10 points better at 128 bid, 130 offered, while the 6 7/8% notes due 2026 gained that much or more, trading between 127 and 129.

The Philadelphia-based chemical company announced the plan confirmation late Thursday. Chemtura is hoping to exit bankruptcy protections within a few weeks.

"We will emerge from this process as a significantly stronger company, having de-levered our balance sheet, improved our cost structure, substantially reduced our cash fixed costs and significantly reduced our environmental and other liabilities," said Craig A. Rogerson, president and chief executive officer, in a press release.

"Chemtura has leading market positions in each segment we serve and with strong globally diverse assets, talented employees and loyal customers. We are confident that Chemtura is poised to emerge as a financially stronger, reliable and a more competitive, leaner global enterprise."

Under the terms of the plan, pre-bankruptcy secured lenders will be paid in full in cash. Holders of the 2026 paper will get cash and stock, as will holders of the 2016 notes.

Blockbuster at a penny

A trader said Blockbuster's 9% notes due 2012 were trading "finally about where they are supposed to be," seeing the bonds cross around 1.

The Dallas-based movie rental chain is currently in bankruptcy, having filed after new methods of video rental kept customers out of Blockbuster's stores.

On Wednesday, Reuters reported that a group of shareholders holding about 40% of the company's stock were preparing to fight the company's current reorganization plan, which gives control to billionaire investor Carl Icahn and a group of hedge funds including Owl Creek Asset Management LP, Monarch Alternative Capital LP, Varde Partners Inc and Stonehill Capital Management LLC.

The stockholder group is reported to be looking for a potential buyer for Blockbuster.

NewPage catching a bid

NewPage paper "traded a little bit, but not as active as it has been," a trader said.

"I think it's catching a little bit of a bid," he added, seeing the 10% notes due 2012 trade up to around 61¼ and the 11 3/8% notes due 2014 to 943/4.

Another trader quoted the 10% notes at 61 bid, 61¾ offered, up a point, though the 11 3/8% notes were unchanged at 94¼ bid, 94¾ offered.

Yet another market source agreed that the 11 3/8% notes were unchanged, pegging them at 94½ bid, 95 offered.

NewPage is a Miamisburg, Ohio-based coated papermaker.

Broad market still mixed

In the rest of distressed land, trading in Dynegy Inc. notes was "pretty non-existent," according to a trader.

He saw the 7¾% notes due 2019 "up and down" around 66, which was "kind of right where it has been."

Another trader said Washington Mutual Inc.'s senior bank notes closed "weaker" at 37½ bid, 38 offered.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.