Clear Channel trades busily, Edison Mission also; Overseas Shipholding edges up

By Paul Deckelman

New York, Feb. 22 - The distressed-debt market was seen ending the week on a quiet note, with most levels little changed, although traders did see some volume in a number of names of bankrupt, stressed or underperforming companies.

One of the busiest was Clear Channel Communications, Inc., whose existing bonds were trading around in the wake of the broadcasting and outdoor advertising company's $575 million issue of new eight-year priority guarantee notes, which came to market on Thursday.

Another credit seen racking up some volume was Edison Mission Energy, whose bonds crept upward and cracked the 50 level, after having held in the 40s for most of the week.

In that same power generating space, Ameren Energy Generating's bonds also had a few big trades to move up a little.

In the convertibles market, A123 Systems Inc., a bankrupt storage battery maker, was seen a little higher, while cargo ship and tanker operator DryShips Inc.'s converts were little changed.

Another maritime name - Overseas Shipholding Group Inc. - saw its straight junk bonds finishing out the week in the upper 30s. They had continued to edge a little higher over a period of a few sessions, as investors who had initially panicked on a report last week that the IRS was going after the bankrupt tanker company for a big tax bill gradually took those bonds off their recent lows.

Clear Channel a busy name

A trader saw a fair amount of trading going on in the existing bonds of Clear Channel Communications, "with all of the Clear Channel in the news" - between the San Antonio, Texas-based diversified media company's new bond issue and its announcement of 2012 fourth-quarter and full-year results earlier in the week.

He said that "one of the ones that traded a lot today" was the company's 9% notes due 2021."We kept seeing that come across."

He saw more than $20 million of those bonds trading, making them one of the busier junk issues on the day, but saw them about unchanged at 92 bid. "I kept seeing that name all day."

Among the company's other existing bonds, a market source saw its 4.90% notes due 2015 up 1¾ points on the day, also at the 92 bid level.

But the company's 6 5/8% notes due 2019 lost nearly 2 points to end just above the 104 bid mark.

Edison Mission active

Another active credit Friday was Edison Mission's 7¾% notes due 2016. They were ending up right around the 51 bid level, which a trader said was up "about 2 or so points."

He said that about $10 million of the bankrupt Irvine, Calif.-based wind energy generation company's bonds traded.

He said that the bonds had been seen around the high 40s "all this week."

Ameren shows improvement

Also in the power-generation space, Ameren Energy Generating's 7% notes due 2018 were finishing around a 58 to 60 bid context.

A trader called that about unchanged on the session, with about $4 million or $5 million having traded.

A second trader, while seeing the bonds at 58¼ bid, called them up 1¼ points on the day.

The St. Louis-based company's paper had been trading on the downside on Thursday.

Overseas Ship anchored in 30s

A trader saw Overseas Shipholding Group's 8 1/8% notes due 2018 closing out the week trading in a 39 to 40 context, with a last print at 39¾ bid.

"It looks like it was up just a little, maybe a point or two," he said.

"All week long, they've been between 37 and 391/2, so I would call it virtually unchanged on the week."

He saw between $3 million and $5 million of the bonds changing hands on Friday.

The bankrupt New York-based tanker operator's bonds have recently encountered some rough seas, hammered down earlier this month from their prior levels in the 40s on the news that the Internal Revenue Service is pressing a $463 million claim against the company.

When that news first hit the market on Feb. 12, the bonds swooned by as much as 10 points during the session, dropping to a low print of 30 bid on the news that Uncle Sam is claiming the company owes some $435.1 million in taxes and another $27.9 million in interest on that sum - a claim to which the company has not yet publicly responded.

The bonds bounced off that low point to end that session around 34 or 35 and have firmed slightly since then, but are still a few points below where they were when the tax claim surfaced.

A123 convertibles better

In the convertibles market, a trader said that A123 Systems' 3¾% notes due 2016 were being quoted around a 71-72 bid context.

He said that the bankrupt Waltham, Mass.-based storage battery manufacturer's bonds "don't trade a lot - they're really a thin issue, but from the last [previous sizable] trade, they're probably up 2 points."

Meanwhile, a trader at another shop said that DryShips' 5% convertibles due 2014 "are trading."

He saw the Greek dry bulk carrier and tanker operator's paper trading around 86½ bid, 87 offered, calling that about unchanged on the session. The company's underlying Nasdaq-traded shares finished down six cents, or 2.96%, at 1.97%, in light volume.

"These have traded pretty actively in recent days," the trader said. "There doesn't seem to be a driver today. They have earnings coming out next Wednesday.

Distressed space quiet

Overall, a trader at a distressed-debt shop - who lately has been lamenting the absence of anything real in that sector - said that "some of the things we were working on were on no one's radar - really small deals, one-offs."

Rebecca Melvin contributed to this review

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