Caesars bonds trend higher; Clear Channel debt creeps upward; NewPage, OPTI stay active issues

By Stephanie N. Rotondo

Portland, Ore., July 5 - The distressed debt marketplace was "better it seems still," a trader said Tuesday.

Still, it was a "pretty slow day," as several players remained absent from their desks.

"The stock market was dead today too," the trader said. "So nothing was pushing anything around."

Caesars Entertainment Corp. was an active credit, though the debt was only slightly better on the day. Clear Channel Communications Inc. was also trading busily, with no fresh news to act as catalyst.

Elsewhere, market mainstays such as NewPage Corp. and OPTI Canada Inc. continued to be active. OPTI closed about unchanged, while NewPage weakened a tad.

Eastman Kodak Co. continued to be rather subdued following news out late last week regarding the company's patent infringement case against Apple Inc. and Research in Motion Ltd. Though there was little trading in the name, a trader said "paper was pretty bid for."

Caesars active, modestly better

Caesars' 10% notes due 2018 were "active, but only up a quarter," according to a trader.

He pegged the issue around 911/2.

Another market source also placed the paper at 91½ bid.

Late last week, Moody's Investors Service warned that the Las Vegas-based casino operator's debt could still get in the way, financially speaking. With about $23 billion in debt, the burden "is eating its cash and may weaken its competitive position.

"Caesars' significant debt-service burden leaves the company with insufficient free cash flow for maintenance of existing assets," said Moody's analyst Peggy Holloway said in a report released Thursday. "We believe this makes Caesars properties prone to market share loss over the intermediate term."

About $12 billion of debt matures in 2015, resulting in Moody's to opine that a restructuring could be coming.

"This is a long liquidity runway, but we don't think it solves Caesars' leverage problems," Holloway said in the report. "Caesars will eventually need to reduce its debt by selling assets, going public or restructuring its debt burden."

Clear Channel channels gains

There was no news out on Clear Channel Communications, but that didn't stop the San Antonio-based multi-media company's debt from trading actively.

A trader said the 10¾% notes due 2016 were "pretty active" and half a point higher around 92.

At another desk, a source deemed the 11% PIK notes due 2016 unchanged at 90½ bid, 91½ offered and called the 10¾% notes firmer at 91½ bid, 92¼ offered.

That compared with 90½ bid, 91¾ offered previously.

NewPage slips, OPTI steady

Market mainstays NewPage and OPTI Canada got their fair share of the action Tuesday, traders reported.

NewPage's 11 3/8% notes due 2014 - which had previously been on a wild ride leading up to the company's coupon payment last Thursday - slipped about half a point to 931/4, a trader said.

OPTI's 8¼% notes due 2014 meanwhile ended "about unchanged" around 42.

Kodak bid for, but quiet

A trader said Eastman Kodak's bonds were "pretty bid for" Tuesday, though there was little trading in the credit.

He saw the 7¼% notes due 2013 at 90¼ bid and the 9¾% notes due 2018 at 90 bid.

Late Thursday, the International Trade Commission issued a partial ruling on Kodak's patent infringement case against Apple and RIM, though the panel did not come to a final decision.

The case has to do with a patent that relates to a method invented by Kodak for previewing images, which was validated by the U.S. Patent and Trademark Office in December 2010. Kodak initially filed an ITC complaint against Apple and RIM on Jan. 14, 2010, asserting that Apple's iPhones and RIM's camera-enabled Blackberry devices infringe a Kodak patent covering technology related to a method for previewing images.

In its ruling Thursday, the ITC elected to "affirm in part, reverse in part, and remand in part, the final initial determination issued by the presiding administrative law judge on Jan. 24."

The panel did find in favor of Kodak on certain issues, such as "the meaning of the patent term 'at least three different colors,'" Kodak said in a statement. "The commission agreed with Kodak that all of Apple and RIM's accused phones infringe this term."

"We are gratified that the commission has decided to modify in our favor the judge's initial recommendation," said Laura G. Quatela, general counsel, chief intellectual property officer, in the statement. "As we have said from the start, we remain extremely confident this case will ultimately conclude in Kodak's favor."

A final ruling target date of Aug. 30 has been set.

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