Nebraska Book notes unchanged, but 'percolating'; Dynegy ends steady to better; Hawker weakens

By Stephanie N. Rotondo

Portland, Ore., May 18 - Trading in the distressed debt market picked up toward the end of Wednesday's session, according to a trader.

"It definitely seems like the end of the day caught a huge [wave]," the trader said. "There was a lot of [secondary] volume, much more than I would have thought.

"But it was still kind of lackluster," he said.

Nebraska Book Co. Inc.'s debt was seen trading in the midweek session, though there was no news out to drive the activity. Still, a trader speculated that something might be stirring up - especially given that the company has previously said it was working on a restructuring plan.

Meanwhile, Dynegy Inc. paper ended unchanged to a bit firmer, though also with no news.

But it was the recent go-to names like NewPage Corp., OPTI Canada Inc. and DirectBuy Holdings Inc. that took the lion's share of attention from distressed investors. All three credits are trending around recent lows as the market ponders what the future will bring.

Nebraska Book 'percolating'

A trader said there was "starting to be a real separation" in Nebraska Book Co.'s bonds.

"They're kind of unchanged, but something is percolating," the trader said. "It's rare you see all of them trade in the same day."

He saw the 8 5/8% notes due 2012 at 76 bid, 77 offered and the 10% notes due 2011 around par.

The 11% notes due 2013 - linked to parent company NBC Acquisition Corp. - were "up and down" around 20, the trader said.

Another trader said the 8 5/8% notes closed at 76 bid, 77 offered and the 10% notes at par bid.

Of both issues, he said they "look about unchanged."

There was no news out on the Lincoln, Neb.-based textbook seller. Back in March, the company said it was in process of putting together a restructuring plan with the help of Rothschild and Kirkland & Ellis LLP. The company said that if it could not come to terms with creditors, it would be forced to file for bankruptcy.

Dynegy steady to higher

Dynegy's debt was "kind of active, but kind of unchanged," according to a trader.

He pegged the 7¾% notes due 2019 around 73.

Another market source deemed the paper up slightly at 73¼ bid.

Like Nebraska Book, there was no fresh news out on the Houston-based power producer to cause the movement.

Hawker unchanged to lower

Among other no-news movers, a trader saw Hawker Beechcraft Acquisition Co.'s 8½% notes due 2015 trading around 85.

"They haven't traded in a while," he said. "That's kind of where it has been."

Another source, however, called the issue down over a point at 84½ bid.

Hawker Beechcraft is a Wichita, Kan.-based aircraft manufacturer and reseller.

Recent notables still active

Recent topical names such as NewPage, OPTI Canada and DirectBuy Holdings continued to take the bulk of investor focus in the distressed sphere, traders reported.

One trader said NewPage "continues to be the single most active bond," as the market tries to decide what will become of the Miamisburg, Ohio-based coated papermaker.

The trader said the 11 3/8% notes due 2014 were "up a little bit," trading around 97. For the subordinated issues - the 10% notes due 2012 and the 12% notes due 2013 - "it's still pretty ugly."

He saw the 10% notes at 45 and the 12% notes at 13.

Another trader called NewPage active and higher, with the 10% notes gaining 3 points to close around 45.

The 11 3/8% notes were deemed up "almost 2 [points]" at 973/4.

In Calgary, Alta.-based OPTI debt, a trader said the 7 7/8% and 8¼% notes due 2014 were " a little bit softer" around 46.

And, Merrillville, Ind.-based DirectBuy's 12% notes due 2017 were hanging around 37 bid, 38 offered.

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