OPTI Canada ends week on stronger note; Harry & David executive departs; Clear Channel better

By Stephanie N. Rotondo

Portland, Ore., Feb. 4 - OPTI Canada Inc. rounded out the week as one of the top trading names and market players reported that the bonds continued to move back up on Friday.

The bonds had begun climbing up on Thursday, after getting hammered in the previous two to three sessions. The losses started after the company announced it had hired a financial adviser.

Meanwhile, news of a top executive departure shook up Harry & David Holdings Inc. investors, one trader opined. The exit - the second in a month - came just weeks after the company said it had hired Rothschild as an adviser.

Clear Channel Communications Inc. has been another recently active credit. Traders said the bonds have been gaining ground of late and one market source said that rumors have been circulating about the company being taken out.

OPTI debt strengthens

A trader said OPTI Canada "remained a topical name, but it wasn't quite as active today" as it had been earlier in the week.

Still, the bonds continued to gain ground, as the trader said the 7 7/8% and 8¼% notes due 2014 trading at 54 bid, 55 offered.

Another trader said OPTI bonds were "all up again," quoting that same market of 54 bid, 55 offered for the subordinated issues. He also saw the 9¾% notes due 2013 at 98 bid, 99 offered and the 9% notes due 2012 at 99¼ bid, 99¾ offered.

The bonds had been falling dramatically since Tuesday, when the Calgary, Alta.-based oilsands producer said it had added Lazard Freres & Co. LLC to its cache of financial advisers.

The company had previously hired Scotia Waterous Inc. and TD Securities Inc. in November 2009.

Harry & David CAO quits

News that Harry & David Holdings' chief accounting officer had resigned "probably spooked the market a little bit," a trader said, resulting in some trading action in the bonds.

The 9% notes due 2013 ended 34 bid, 35 offered, according to the trader.

Another trader pegged the paper at 36 bid, 37 offered, down from 42 bid, 43 offered a week ago.

Bernard Colpitts left his post on Jan. 28, according to a filing with the Securities and Exchange Commission. Earlier in the month, Drew Reifenberger, chief customer officer, was dismissed from his position, resulting in a breach of contract lawsuit against the Medford, Ore.-based specialty retailer.

Prior to their departures, Harry & David announced it had hired Rothschild as financial adviser and Jones Day as legal counsel to assist with a restructuring effort.

Clear Channel active, better

Clear Channel bonds have "been active for the past couple of days," according to a trader, though there hasn't been any fresh news out on the San Antonio-based multimedia company.

The trader saw the 11% notes due 2016 ending at 96 bid, 97 offered, compared with 95½ bid, 96 offered previously.

"So they continue to creep up," he said.

The 5½% notes due 2014 were also better, trading around 92.

Another trader saw "$20-odd million" of the 5½% notes changing hands at 921/2, up "almost 3 points" on the day. The 11% notes were seen at 97½ - up a deuce - on "$40-odd million" traded.

The 10¾% notes due 2016 meantime jumped 4 points to end around 99, with about $20 million of the bonds turning over.

According to the second trader, the rumor mill has been saying that Clear Channel is going to be taken out. Though there has not been any news to confirm this, "it seems to have gotten some credence in the marketplace," he said.

At another shop, a trader called the 5½% notes 3 points better at 92½ and the 10¾% notes "almost 4" higher at 983/4.

Market buzz: Ahern

Prospect News previously reported that market chatter was Ahern Rentals Inc. had hired a financial adviser to evaluate its restructuring options. The saga continued Friday, as Prospect News learned the rumor was false.

According to a source familiar with the matter, buzz was that Ahern had retained Alvarez & Mansel. The source told Prospect News that he had received confirmation from Ahern's chief financial officer, Howard Brown, that the rumor was false.

The source also argued against valuating the company at 10 cents on the dollar.

"That seems extraordinarily unlikely," he said, because the equipment rental space as a whole "has been on a tear."

At the height of the financial crisis, several companies in the sector reduced their fleets. Ahern, however, was not one of them.

Additionally, equipment rentals are picking up, given that "there has been a pick up on jobs that are more equipment intensive."

He added that Ahern's utilization was up to 63% for the most recent quarter, up from 42% a year ago.

Market buzz: Blockbuster

Blockbuster Inc. is coming under fire - again - as Summit Distribution LLC has filed papers with the court overseeing the company's bankruptcy proceedings, asking for a conversion from Chapter 11 to Chapter 7.

Summit, which has produced the "Twilight" saga movies, claims that the Dallas-based movie rental chain owes them $9.5 million, which Blockbuster has reportedly said it could not pay because it did not have the funds.

"The debtors informed Summit that the debtors would not pay Summit with respect to products that were shipped post-petition because the debtors lacked the funds to do so," lawyers for Summit wrote, according to court documents.

"Good luck with that," one market source quipped of Summit's attempt to liquidate Blockbuster. He opined that Blockbuster would come out the winner.

Another market source said he was not sure if it was a fight worth fighting, but speculated that the creditor's attempt was based on the fact that Blockbuster "is probably burning through cash as long as they stay alive."

The company's bonds did not trade Friday.

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