Overseas Shipholding inks tax deal, gets competing term sheets, giving debt lift; Nortel rises

By Stephanie N. Rotondo

Phoenix, Dec. 19 - The distressed debt market zeroed in on Overseas Shipholding Group Inc. on Thursday following a court hearing for the bankrupt ocean shipping company.

One trader said the bonds were the day's "biggest mover," seeing the 8 1/8% notes due 2018 move up to a 110½ to 111 context, versus previous levels around 103.

He noted that all of the company's various debt issues "all kind of trade the same."

The trader also pointed out that the equity (OTCBB: OSGIQ) was "up dramatically."

The stock closed up $1.60, or 35.96%, to $6.05.

At the court hearing, the New York-based company said that it had inked a deal with the Internal Revenue Service regarding a $470 million tax claim. Under the terms of the settlement, that claim - the catalyst that pushed the company into bankruptcy to begin with - could be reduced to $256 million.

Also at the hearing, the company announced that it had received two competing term sheets that could evolve into plans of reorganization. The official committee of unsecured creditors submitted one proposal and an informal group of noteholders submitted another.

Though few details of the plans were released, it was noted during the hearing that the noteholder plan would provide the best recoveries across the board. But it was not clear if the plan had the financial backing to be completed.

The company said it was looking for exit financing that would make the plan viable.

Nortel moves up

News regarding a European claim settlement from earlier in the week has been helping Nortel Networks Inc.'s debt creep higher, a trader said.

He saw the 10¾% notes due 2016 moving up 1½ points to 117.

On Tuesday, the Canadian telecommunications manufacturer said it had reached a tentative settlement with creditors regarding two European claims. Nortel said it had agreed to pay up $37.5 million to close out the EMEA claims and another $37.5 million to settle U.K. pension claims.

In resolving these claims, the company inches closer to exiting the bankruptcy process and finally distributing some recoveries to creditors.Overseas Shipholding inks tax deal, gets competing term sheets, giving debt lift; Nortel rises

By Stephanie N. Rotondo

Phoenix, Dec. 19 - The distressed debt market zeroed in on Overseas Shipholding Group Inc. on Thursday following a court hearing for the bankrupt ocean shipping company.

One trader said the bonds were the day's "biggest mover," seeing the 8 1/8% notes due 2018 move up to a 110½ to 111 context, versus previous levels around 103.

He noted that all of the company's various debt issues "all kind of trade the same."

The trader also pointed out that the equity (OTCBB: OSGIQ) was "up dramatically."

The stock closed up $1.60, or 35.96%, to $6.05.

At the court hearing, the New York-based company said that it had inked a deal with the Internal Revenue Service regarding a $470 million tax claim. Under the terms of the settlement, that claim - the catalyst that pushed the company into bankruptcy to begin with - could be reduced to $256 million.

Also at the hearing, the company announced that it had received two competing term sheets that could evolve into plans of reorganization. The official committee of unsecured creditors submitted one proposal and an informal group of noteholders submitted another.

Though few details of the plans were released, it was noted during the hearing that the noteholder plan would provide the best recoveries across the board. But it was not clear if the plan had the financial backing to be completed.

The company said it was looking for exit financing that would make the plan viable.

Nortel moves up

News regarding a European claim settlement from earlier in the week has been helping Nortel Networks Inc.'s debt creep higher, a trader said.

He saw the 10¾% notes due 2016 moving up 1½ points to 117.

On Tuesday, the Canadian telecommunications manufacturer said it had reached a tentative settlement with creditors regarding two European claims. Nortel said it had agreed to pay up $37.5 million to close out the EMEA claims and another $37.5 million to settle U.K. pension claims.

In resolving these claims, the company inches closer to exiting the bankruptcy process and finally distributing some recoveries to creditors.

© 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.