Nokia falters on HQ sale chatter; Supervalu bonds sink; Best Buy rises as buyout moves forward

By Stephanie N. Rotondo

Phoenix, Oct. 3 - While the overall market had a firm feel to it Wednesday, that was not necessarily the case for distressed bonds.

Nokia Corp. dipped a bit, as the company said it was considering selling its headquarters in an effort to raise cash. Supervalu Inc. was also weaker, on reports that potential buyers only want parts of the company, not the whole.

However, Best Buy Corp. inched up during the session. The gains came as it was reported that Richard Schulze, former chief executive of the electronics retailer, was moving forward with his proposed takeover of the company.

Nokia dribbles down

A trader said Nokia bonds were "drifting lower" on the day, though he noted that there were minimal trades.

He said the 5 3/8% notes due 2019 had been holding steady at 84½ bid, 85½ offered. On Wednesday, however, the paper fell to levels around 83 and was quoted even lower.

The 6 5/8% notes due 2039 meantime slipped over half a point to 793/4.

Another trader said the name was "fairly quiet, but a little lower," seeing the 5 3/8% notes trading with an 83 handle.

Nokia has been struggling to keep up with its rivals in the wireless telecommunications field. The company has been looking for ways to raise cash and confirmed that it was considering a sale of its headquarters in Espoo, Finland.

The sale could bring in as much as $357 million, one news outlet reported.

Still, even if the company does sell the property, it also said it has no intention of moving, which means it will have to lease back the property from a new owner.

Supervalu sinks

Supervalu debt declined in midweek trading as the market learned potential buyers wanted to piecemeal the company out.

"All saw minimal trading, but they've been drifting," a trader said.

He pegged the 8% notes due 2016 at 88, the 7½% notes due 2014 at 94½ and the 7¼% notes due 2013 at par 7/8.

The issues were down anywhere from half a point to 1½ points, he said.

Another market source deemed the 8% notes off 1½ points at 88¼ bid.

A third source put the 8% notes even lower at 871/2.

"They were a bit more active," he said.

The Eden Prairie, Minn.-based grocery store chain previously noted that it was reviewing its strategic options, including a potential sale of the company. Potential buyers include billionaire Ronald Burkle and buyout firms KKR & Co. and TPG Capital, though the buyers are reported to only want parts of the company, not the whole.

For its part, Supervalu is still attempting to find a buyer of the whole and have therefore extended an offer deadline to Oct. 15.

Best Buy boosted

A private equity takeover of Best Buy is said to be moving forward, giving the company's bonds a boost.

A trader saw both the 3¾% notes due 2016 and the 5½% notes due 2021 rising half a point to 97¼ and 941/2, respectively.

Another trader said the 5½% notes were "a touch better," trading around 95.

Schulze, Best Buy's former CEO and founder, previously proposed a private equity takeover in August. Schulze owns 20% of the company.

Schulze is also looking to partner with private equity firms and has reportedly attracted interest from Apollo Global Management, Cerberus Capital Management, TPG Capital and Leonard Green & Partners.

Though the bonds reacted positively to the news, there was some chatter in the market that a takeover would not be the best option for the already struggling retailer, as it would likely add more debt to the balance sheet.

Distressed a mixed bag

Elsewhere in the distressed realm, a trader said NewPage Corp.'s 11 3/8% first-lien notes due 2014 "continue to get beat up," calling the paper down 3 points to 57 bid, 58 offered.

Eastman Kodak Co.'s 7¼% notes due 2013 were also lower, trading at 11.

However, Ambac Financial Group Inc.'s debt - which tends to trade on top of one another - was stronger around 40.

Overseas Shipholding Group Inc.'s 8 1/8% notes due 2018 were also firm, rising half a point or so to 67 bid, 68 offered.

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