Sears bonds slip as CEO offers new loan; traders mixed on Colt; NII stays busy post-filing

By Stephanie N. Rotondo

Phoenix, Sept. 16 – Distressed debt investors put pressure on Sears Holdings Corp.’s debt on Tuesday following news the company had secured a loan from its chief executive officer’s hedge fund.

While the new funds bring the company closer to the goal of raising $1 billion this year, it raised concerns that efforts to monetize other assets weren’t going so well.

Elsewhere in the retail space, a trader said Gymboree Corp.’s 9 1/8% notes due 2018 were “still at the top of the most actives.”

But after steadily declining since reporting dismal earnings on Wednesday, the bonds earned 3 points in Tuesday trading, ending around 35½.

Another trader said the name was “creeping up throughout the day,” finishing with a 35 handle.

RadioShack Corp.’s 6¾% notes due 2018 were meantime “up a little bit” at 37½, according to one trader.

The trader called that about 1½ points better on the day.

Meanwhile, traders gave mixed impressions of Colt Defense LLC’s bonds. The West Hartford, Conn.-based gun manufacturer released earnings on Monday that showed a swing to a loss, as sales declined due in part to a drop in rifle demand.

The company then held a conference call to discuss said results Tuesday morning.

After the filing for bankruptcy protections on Monday, NII Holdings Inc.’s bonds continued to be actively traded, according to traders. As was the case in the previous session, the debt continued to gain ground.

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