Overseas Shipholding asset sale fails but bonds gain; J.C. Penney busy, weaker; Exide holds in

By Stephanie N. Rotondo

Phoenix, April 10 - The distressed debt market was firming along with the broader market on Wednesday.

"A lot of stuff was rising to newer highs," a trader said of the general high-yield arena. "There was nobody to really talk about much on the down side."

"Everything was stronger," said another trader.

Overseas Shipholding Group Inc.'s debt was up as much as 2 to 3 points, according to one trader. The gains came even as an asset sale fell apart.

Meanwhile, J.C. Penney Co. Inc. continued to be active following news from earlier in the week regarding the ouster of Ron Johnson as chief executive officer.

In other recently notable names, Exide Technologies Inc. paper was hanging in there, while Momentive Performance Materials Holdings LLC's debt was on the firm side. There was no fresh news out on either name, however.

OSG up, asset sale fails

A trader deemed Overseas Shipholding's bonds up by 2 to 3 points on the day, despite a failed asset sale.

The trader pegged the 8 1/8% notes due 2018 at 82 and the 7½% notes due 2024 at 81.

Another trader quoted the 7½% notes at 80 bid, 81 offered.

The New York-based ocean shipping company said in a court hearing on Wednesday that a sale of some of its fleet had fallen through, as the company was unable to come to terms with the interested parties.

A hearing on the potential sale had been scheduled for April 25. That was postponed indefinitely.

J.C. Penney debt dips

J.C. Penney remained a notable name in the distressed debt space on Wednesday.

"They've been more active on that news of the new CEO," a trader said, referring to the exit of Ron Johnson and the re-hiring of former CEO Mike Ullman.

The trader called the 5¾% notes due 2018 unchanged at 861/2.

Another trader said the bonds were "a touch weaker," seeing the 5¾% notes at 86½ and the 7.4% notes due 2037 at 80.

J.C. Penney, a Plano, Texas-based retailer, is also currently embroiled in a legal battle with Macy's regarding a plan to sell Martha Stewart products in its stores. Macy's says the plan violates its contract with Stewart's company.

Exide, Momentive stay active

Exide Technologies' 8 5/8% notes due 2018 were called up slightly at 76¼ at one shop on Wednesday.

Another trader said the issue "hung in" around the 76 mark.

Yet another trader said the debt was "basically unchanged," trading in a 76 to 77 context.

Momentive Performance's bonds were meantime on the rise, though with no fresh news to act as catalyst.

A trader saw the 11½% notes due 2016 rising almost 2 points to 651/4, while the 9% notes due 2021 gained over 1½ points to 81.

Another trader also pegged the 9% notes at 81, calling that "up a couple points."

Kodak stubs on fire

Eastman Kodak Co.'s second-lien stubs "continue to go crazy," a trader said.

"It goes up 3 to 4 points every day," he said.

The trader noted that a rumor was circulating regarding a potential unsecured rights offering.

He placed the stubs around 67 during the midweek session.

Broad market firms

Elsewhere in the land of distressed bonds, a trader said Caesars Entertainment Corp.'s 10% notes due 2018 were up nearly half a point to 67 1/8.

The trader also saw Clear Channel Communications Inc.'s 10¾% notes due 2016 moving up a deuce to end around 81.

At another desk, a trader said AmerenEnergy Generating Co.'s bonds were up about 2 points, the 7% notes due 2018 at 851/2, the 6.3% notes due 2020 at 77½ and the 7.95% notes due 2032 at 761/2.

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