Trading in Kodak paper remains volatile; Caesars continues to be active; Berry Plastics slips

By Stephanie N. Rotondo

Portland, Ore., Sept. 27 - Distressed debt was sitting on the sidelines Tuesday as investors focused on equities and new issues in the high-yield arena.

"A bunch of higher quality new issues came today. That was a bunch of the focus," a trader said.

Eastman Kodak Co. "continued to be kind of volatile," according to a trader. Market sources gave mixed reports, however, on how the bonds fared following the company's Monday announcement regarding a draw on its credit facility.

As has been typical of late, Caesars Entertainment Corp.'s debt remained active, but even in that credit, traders could not agree on whether the paper was up or down.

A trader said that Berry Plastics Corp. debt has been trading down, though on no news.

Kodak remains volatile

Eastman Kodak's debt was still trading actively on Tuesday following Monday's news that the company had drawn $160 million of its revolving credit facility.

The draw increased fears regarding the Rochester, N.Y.-based company's cash burn, and investors were concerned that the company might not be able to sell its patents soon enough to avoid running out of cash. The news resulted in losses of up to 25 points for the bonds in just one trading session.

On Tuesday, a trader saw the 9¾% notes due 2018 "a couple points lower again" at 71 bid, 72 offered, while the 7¼% notes due 2013 were "basically unchanged" at 62 bid, 63 offered.

Another trader deemed the 7¼% notes up "about a point" around 63, while a third market source called the notes 1½ points higher at 63 bid.

Meanwhile, a trader said the 7% convertible notes due 2017 were continuing to fall and were trading in a range between 44 and 46, down from levels around 47.5 on Monday.

Around noon, a trader saw the convertibles trading at 48.5 versus a stock price of $1.95.

Caesars still active

The always-active Caesars Entertainment continued to be busy in Tuesday trading, though there was no fresh news out on the Las Vegas-based casino operator.

One trader said the 10% notes due 2018 were "kind of where they left off [Monday]" at 62 bid, 64 offered.

Another source pegged the issue at 64 bid, a gain of 2 points on the day.

A third source said the paper was "pretty active" and down "about a point" to close around the 63 mark.

Berry bonds giving the slip

A trader said Berry Plastics' 9¾% subordinated notes due 2021 have seen "no real activity in the Street," but that wasn't stopping them from trading down.

"There's something going on with packaging, paper" and anything cyclical, he said.

He said the subs had traded at 90, then at 89 then finally at 87. He was not sure why the bonds were being pressured, and there was no fresh news out.

In a related arena, NewPage Corp.'s 11 3/8% first-lien notes due 2014 were up slightly at 823/4, according to a trader.

Broad market mixed

Among other distressed issues, OPTI Canada Inc.'s 7 7/8% and 8¼% subordinated notes due 2014 were "up a touch," a trader said, at 63½ bid, 64 offered.

Lehman Brothers Holdings Inc.'s debt was meantime unchanged around 241/2, the trader said.

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