Clear Channel gets push ahead of new issue; OPTI settling in; Nebraska Book steady on numbers

By Stephanie N. Rotondo

Portland, Ore., Feb. 14 - It might have been Valentine's Day, but distressed debt traders weren't seeing much love in Monday's marketplace.

"It was pretty quiet," a trader said. "Guess everybody was out getting roses for their wives."

Still, investors were giving love to Clear Channel Communications Inc. bonds, as they waited for pricing on a new issue, slated to hit the market on Tuesday. The proceeds from the private placement offering will be used to pay down existing debt.

Meanwhile, traders saw OPTI Canada Inc. paper holding their ground. Several traders said the debt was still on the busy side, but one noted that action had quieted down significantly from last week.

Nebraska Book Co. Inc. filed its quarterly report with the Securities and Exchange Commission on Monday, but there was little going on in the company's notes. A conference call to discuss the results will be held on Tuesday.

Also, Tousa Inc. saw its debt plummet, according to a trader, after a district judge overturned a ruling in the defunct homebuilder's fraudulent transfer case.

Clear Channel debt gains

A trader said investors were "focused on this Clear Channel new issue," which is set to price on Tuesday.

"Some of their existing paper was trading up ahead of that," he said, placing the 10¾% notes due 2016 at 98 and the 11% notes due 2016 "close to 97."

Another trader saw the 5½% notes due 2014 "wrapped right around 92," while the 11% notes were quoted at 96½ bid, 97¼ offered.

"That's up about a point from last week," he said.

But another trader said the 11% notes were the only issue to trade in any real size, seeing some "$10-odd million" of the paper changing hands at 96½ bid, 96¾ offered.

He deemed that level unchanged.

The San Antonio-based multimedia company is selling $750 million of priority guarantee notes due 2021 via a Rule 144A offering. About $500 million of the proceeds will be used to pay down bank debt, while the remaining $250 million will be used to partially refinance the 6¼% notes due this year.

The issue is slated to price Tuesday and talk is around 8¾% to 9%.

"Clear Channel's proposed note issue is a step towards fixing its hugely overleveraged capital structure. A small step," wrote Gimme Credit LLC Analyst Kim Noland in a research note. Noland noted that the issue is small versus the amount of debt maturing through 2014 - almost $5 billion - but that it seemed to be enough to satisfy lenders, allowing the company to amend and extend terms on its bank debt.

Noland also remarked that Clear Channel has enough liquidity to avoid a restructuring until 2012 or 2013.

Of the new issue, a trader said that market views on the upcoming deal were "kind of mixed - I can't seem to find many accounts that are playing it, yet I'm hearing that [lead underwriter] Goldman [Sachs] is saying that the deal is in good shape. So I'm not quite sure what's going on there."

OPTI unchanged to lower

OPTI Canada bonds saw "a little trading, but it wasn't that big a deal today," according to a trader.

He said the subordinated issues - the 7 7/8% notes and 8¼% notes due 2014 - "stayed in that" 47½ bid, 48½ offered context.

Another trader, however, called the paper half a point weaker around 471/2.

The Calgary, Alta.-based oilsands producer's debt had been gyrating for weeks, as the market waited to see what the fourth-quarter results would look like. The earnings were released on Thursday and the company warned that its Long Lake joint venture project with Nexen Inc. might not reach previously forecast production levels is operations did not improve soon.

Nebraska steady on numbers

Nebraska Book Co.'s debt was on the quiet side as the company filed its 10-Q with eh Securities and Exchange Commission.

A trader said "not much traded," and called the notes unchanged. He placed the 8 5/8% notes due 2012 at 89½ bid, 90½ offered, the 11% notes due 2013 - linked to parent company NBC Acquisition Corp. - at 49 bid, 50 offered and the 10% notes due 2011 at par bid, 101 offered.

For the quarter ending Dec. 31, the Lincoln, Neb.-based textbook seller saw revenues of $69.23 million, a 3.6% gain year over year.

Net loss decreased to $13.63 million from $14.89 million the year before.

Nebraska Book also said it was in talks to refinance its $75 million ABL credit facility. Such a transaction might also require the refinancing of the company's bonds.

Tousa bonds plummet

A trader called Tousa a notable name of the name, as the company's 9% notes due 2012 dove to the teens from the 50s.

The trader said the drop came after Friday's news regarding the company's fraudulent transfer case.

Another market source pegged the paper at 16.

In October 2009, the bankruptcy court overseeing the case ruled that lenders had to fork over about $480 million as a disgorgement payment for debt payments received on July 31, 2007. The court called the deemed the payment to be a fraudulent transfer.

The lenders appealed the ruling and the district court overturned the previous decision.

Tousa is a Hollywood, Fla.-based homebuilder. The bankrupt company is currently in process of liquidating.

Broad market mixed

Elsewhere in distressed land, a trader said Alcatel-Lucent USA Inc.'s 6.45% notes due 2029 were on the active side and better, though he wasn't sure why.

He placed the notes around the 86¾ mark, a level echoed at another desk as well.

Also in the telecommunications space, a market source saw Mexican telecommunications company Grupo Iusacell's 10% notes due 2012 down 2¼ points, at 70¼ bid. However, its 10% notes due 2013 were quoted up nearly 2 points on the day, at just under 31 bid.

At another shop, a trader said that Sbarro Inc.'s 10 3/8% notes due 2015 were "maybe a little softer," trading around 34.

The trader also saw NewPage Corp.'s 12% "super sub" notes due 2013 "up a little more" around 331/2.

Blockbuster Inc.'s 9% notes due 2012 were quoted at 1 bid, 2 offered. "I guess where they are suppose to be," the trader said.

Paul Deckelman contributed to this article

© 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.