Distressed debt ends week with firm tone; Momentive bonds gain steam; NII continues to climb

By Stephanie N. Rotondo

Phoenix, Feb. 7 - Distressed bonds had a "much stronger theme towards the afternoon," a trader said Friday.

Another trader agreed, commenting that "things in general had a firmer tone," shaking off a disappointing jobs report.

Momentive Performance Materials Inc. saw its debt move "up smartly," according to one trader. Another trader attributed the gain to news the company may be close to coming up with a plan to deal with its second-lien debt.

NII Holdings Inc. was also climbing higher, continuing its rise that began earlier in the week when the company launched its push-to-talk app for the iPhone.

Even J.C. Penney Co. Inc. was benefiting from the overall rally, though a trader noted that volume in the name was limited. The debt had been hit earlier in the week when the company reported a 2% gain in fourth-quarter same-store sales - lower than the 4.1% analysts were expecting.

Momentive gains steam

Momentive Performance bonds got a boost on Friday. One trader said the strength was due to a news article out late Thursday.

"Just more speculation on what's going happen in the cap structure to deal with the second-liens and the 111/2[% notes due 2016]," he said.

The trader pegged the 11½% notes around "76-ish" and the 9% notes due 2021 at 93 bid, 93½ offered.

Another trader said the 11½% notes were 'up smartly," rising nearly 3 points to 76.

Momentive is a Columbus, Ohio-based producer of specialty chemicals.

NII Holdings remains strong

NII Holdings' upward momentum continued into Friday trading.

One trader said the 7 5/8% notes due 2021 put on half a point to close around 461/2, while the 8 7/8% notes due 2019 gained almost a point to end around 531/4.

Another trader deemed the debt "better," seeing the 7 5/8% notes "up about a point" at 461/2.

The Reston, Va.-based company's bonds began to gain ground following news the company had launched a push-to-talk app for the iPhone.

NII provides Nextel mobile phone service in Latin America.

J.C. Penney debt rallies

A firm market helped J.C. Penney debt rebound a bit in Friday trading.

However, volume in the name was muted, a trader said.

The trader called the 5¾% notes due 2018 "probably a point higher," trading around 73.

Another trader saw the 7.4% notes due 2037 at 661/2, up 1½ points on the day.

J.C. Penney is a Plano, Texas-based retailer.

Distressed market tidbits

A trader said OGX SA's 8 3/8% notes due 2022 drifted down to 3½ on Friday.

The slip came as it was being reported that the company had reached a deal with a group of creditors led by Pacific Investment Management Co. that would give the company up to $200 million in new debtor-in-possession financing and would take majority control away from owner Eike Battista.

Meanwhile, another trader said Overseas Shipholding Group Inc.'s bank debt rallied up to 106½ on news Caspian Investments had bought up a bunch of the loans.

Also, Energy Future Holdings Corp.'s 10% notes due 2020 slipped to 105 from 1053/4, according to a trader, on news the company's efforts to restructure might soon be revealed.

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