Kodak debt keeps climbing; NewPage gains momentum; Tribune firms on case buzz; broad market up

By Stephanie N. Rotondo

Portland, Ore., Oct. 19 - Distressed debt "continued to be on the stronger side of things," a trader said Wednesday.

He said investors were participating in a "land grab," and although it has been mostly in higher-end credits, that has also given the distressed and secondary markets a boost.

Eastman Kodak Co. paper was continuing to firm after the company said earlier in the week that it had licensed patents to Imax Corp. The licensing will help the company narrow a cash shortfall and increase royalty revenues.

NewPage Corp. was also heading upward, despite creditors filing an appeal on a portion of the debtor-in-possession facilities.

Meanwhile, chatter that Tribune Co.'s reorganization plan might be inching closer to confirmation resulted in firmness in the company's term loans, although the bonds were "very quiet."

Kodak remains firm

A trader saw Eastman Kodak's 7¼% notes due 2013 heading up to levels around 42 on Wednesday.

Another trader said the bonds "weren't doing too much," but were a "touch better" at 41½ bid, 42 offered.

The company recently announced that it had licensed its laser-projection patents to Imax. The Rochester, N.Y.-based company has been attempting to increase its royalty revenues in an effort to avoid bankruptcy. Under the terms of the 10-year deal with Imax, Kodak will receive an upfront payment of more than $10 million, a milestone payment and ongoing royalties.

The company will use proceeds for general corporate purposes.

NewPage heads up

NewPage's debt was on the rise despite the company's official committee of unsecured creditors filing an appeal on a portion of the DIP financing.

Specifically, the committee said it was appealing just the portion of the DIP financing order that prohibits the charging of expenses of the estates against noteholder collateral, the notes collateral trustees, the notes indenture trustees or the secured noteholders.

The trader pegged the 11 3/8% first-lien notes due 2014 at 74 and the 10% second-lien notes due 2012 at 12.

Another trader also saw the first-liens trading up to 74.

Miamisburg, Ohio-based papermaker NewPage filed for bankruptcy on Sept. 7.

Tribune loan gains

Tribune's term loan B headed higher on Wednesday on chatter that the judge is close to ruling on its bankruptcy case, according to a trader.

The term loan B was quoted at 58 bid, 59 offered, up from 57 bid, 58 offered on Tuesday, the trader said.

"The term loan was up 3 to 4 points in anticipation of a deal actually coming to fruition," a trader said. "But it's absolutely quiet in the bonds."

Tribune is a Chicago-based media company.

Hovnanian trades higher

A trader saw Hovnanian Enterprises Inc.'s 10 5/8% notes due 2016 trading up around 80 bid.

He called that up 2 points from the lows of Tuesday, when the bonds were offered at 781/2, and up three quarters of a point from Tuesday's highs in the 79 area.

The bonds had moved up on Tuesday after an unexpectedly positive report from the homebuilding industry's main trade group, the National Association of Home Builders, gauging sentiment within the industry.

Broad market firms

Elsewhere in the distressed space, a trader said Nebraska Book Co. Inc.'s were trading up, the 10% notes due 2011 at 90 bid, 92 offered and the 8 5/8% notes due 2012 at 45 bid, 50 offered.

He also saw OPTI Canada Inc.'s 7 7/8% and 8¼% subordinated notes due 2014 stronger around 65.

A second trader said the bonds were "a bit better, trading at 65."

Sara Rosenberg and Paul Deckelman contributed to this article

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