Distressed space cedes spotlight to new issues; RadioShack lightens up; Kodak holds its ground

By Stephanie N. Rotondo

Phoenix, Sept. 28 - The distressed debt market took a back seat to new issues, which continued to crank out in the high-yield bond market on Friday, boosting overall volume in the space to nearly $2 billion, a trader said.

Still, "the market was a little off today," he said.

RadioShack Corp. bonds were on the softer side, as the company announced it had secured a new $100 million term loan.

Eastman Kodak Co. meantime held its ground, despite news the company was looking to lay off more employees.

And, ATP Oil & Gas Corp.'s debt took a hit. It was not clear if recent losses in the name had anything to do with Transocean Ltd.'s recent troubles.

RadioShack softens

RadioShack's 6¾% notes due 2019 were "definitely softer," a trader said, as the company announced it had secured a new term loan.

The trader pegged the notes at 59 bid, 60 offered, down from 62 bid, 63 offered.

Another trader said the debt had fallen 2½ points on Friday, to 601/4.

The Fort Worth-based electronics retailer said it had secured a $100 million 11% five-year term loan via Wells Fargo. The funds will be used to refinance and pay down debt.

Kodak unfazed by news

Despite news of more job cuts, Eastman Kodak's debt was hanging in Friday.

A trader said the second-lien issues - the 9¾% notes due 2018 and the 10 5/8% notes due 2019 - were "kind of unchanged" at 63½ bid, 64½ offered.

Another trader echoed that market, also calling the paper unchanged.

The bankrupt Rochester, N.Y.-based company said Friday that it planned to axe another 200 jobs as it prepares to stop selling consumer inkjet printers next year. The layoffs are in addition to 3,700 that were announced earlier in the year.

Kodak recently said that it was planning to sell its consumer-film, photo-kiosk and commercial-scanner businesses. A planned auction for a patent portfolio has yet to reach a conclusion and the company has said it may instead decide to keep the patents and establish a licensing company to generate revenues from them.

ATP under pressure

A trader said ATP Oil & Gas' 11 7/8% notes due 2015 were "getting clobbered," seeing the bonds fall to around 19.

"Every day, it just goes lower," he said, adding that he had not seen any particular news out to explain the dips. "There's a lot of hearings going on, a lot of fluid information out there."

Whatever it was, "clearly somebody was a motivated seller."

The trader further remarked that he was not sure if news regarding an injunction slapped against Transocean Ltd. had anything to do with the declines.

Transocean said Thursday that it had been ordered by the Brazilian government to halt drilling at its nine rigs off the coast of the South American country. The injunction came amid pending lawsuits over the Frade field oil spill that occurred in November 2011.

At the time of the spill, Transocean was running a rig for Chevron Corp.

Transocean was also involved in the April 2010 Deepwater Horizon disaster.

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