R.H. Donnelley quiet, Idearc better; Charter slips on profit taking; CIT boosted by new credit line

By Stephanie N. Rotondo

Portland. Ore., June 9 - R.H. Donnelley Corp. announced it would extend the tender deadline for its exchange offer Monday, but the news did little to interest investors.

Traders said the phonebook publisher's bonds were largely quiet, and any issues that were trading were essentially unchanged. However, sector peer Idearc Inc. saw its debt trading somewhat actively - considering the overall lack of action in the distressed arena Monday - and closed the session slightly better.

Last week's run-up resulted in profit taking in Charter Communications Inc.'s debt. The company's bonds fell as much as 2 points on the day as investors took advantage of recent gains in the credit.

Meanwhile, CIT Group Inc. announced it had received new financing from Goldman Sachs. That news helped the company's longer paper gain 1 to 2 points during the session. Short paper, however, closed unchanged.

Overall, the market was deemed softer, as players took a "wait-and-see" approach following the nearly 400-point loss in the stock market Friday.

"Trading was really mundane," a trader said. "Stuff barely moved."

"It was a pretty typical summer Monday," another trader stated. After the goings-on in Friday's market, "people are just trying to feel it out."

R.H. Donnelley quiet, Idearc better

R.H. Donnelley said Monday it would extend its deadline for an exchange on its 11¾% notes due May 15.

Despite the news, the online and phonebook directory publisher's corporate debt was rather quiet. One trader said he had seen nothing since June 3, while another called the name "very, very quiet."

Elsewhere, a trader saw the 8% notes due 2013 at 79.5, unchanged from late last week. Another trader pegged the issue at 79 bid, 80 offered, also unchanged.

But as R.H. Donnelley's bonds held steady, sector rival Idearc saw its debt gaining.

One trader called Idearc's 8% notes due 2016 "marginally up" at 72.25 bid, 72.75 offered, versus opening levels of 72 bid, 72.5 offered. Another source said there was "a little action" in the name, placing the notes around 72, "about where they were."

At another desk, a trader called the paper up a point at 71.75 bid, 72.75 offered, though another called the bonds unchanged at 71.5 bid, 72.5 offered.

Charter slips on profit-taking

Profit-takers were blamed for softness in Charter Communications' paper Monday.

A trader called Charter's debt "a touch softer" on profit-taking, "coupled with softness in the market," its 11% notes due 2015 at around 87 and its 9.92% notes due 2014 at 69.5 bid, 70 offered.

Another trader called the 9.92% bonds down 2 points at 68 bid, 70 offered. But another source saw the 8% notes due 2012 gain a quarter point to close at 99 bid.

Last week, Charter's bonds steadily climbed, though there was no news to prompt the move. Traders speculated that investors were beginning to become more comfortable with the credit and were starting to think that the company could manage a turnaround.

Charter Communications is a St. Louis-based telecommunications provider.

CIT boosted by new credit line

News of a new credit line with Goldman Sachs boosted CIT Group's longer-dated issues, traders reported.

One trader called the 5% notes due 2015 "up a solid point or 2" at 80.5 bid, 81.5 offered, up from Friday levels around 79.75. Another trader called that up 1 to 1.5 points, "relative to Friday," while another pegged the bonds at 81 bid, 81.5 offered.

"There was significant volume [in that issue]," he said, especially for a day like today.

At another desk, a trader deemed the 5.4% notes due 2013 up 2 points at 82.5 bid, 84.5 offered.

But shorter-dated paper ended unchanged, according to one source. He said that debt, such as the 3.13% notes due 2008, closed at "98 and change."

"The short-dated paper is not going to move that much," he said. 'But it looks like the longer-dated paper got a boost."

CIT received $3 billion in financing from Goldman Sachs on Monday - just a few months after CIT had to increase emergency credit lines due to liquidity issues. As of last week, CIT had $8.1 billion in unsecured term debt, as well as $2.1 billion in bank debt.

"We view this transaction as another important milestone in achieving our desired financing profile," Jeffrey Peek, CIT's chief executive, said in a statement.

Though not technically considered a distressed credit, CIT has parlayed onto the fringes of distressed territory, like several other financial institutions. CIT has faced several quarters of losses and has struggled since the subprime meltdown began. Since then, CIT has halted its home lending, instead focusing on mid-sized business loans in an effort to clean up its financial profile.

CIT is a New York-based financial lender.

Broad market mostly unchanged

Harrah's Operating's 10¾% notes due 2016 ended unchanged at 86 3/8 bid, 86.5 offered.

Rite Aid Corp.'s 9 3/8% notes due 2015 closed at 77.25, while the 8 5/8% notes due 2015 ended at 77.25 bid, up nearly a point.

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