Nokia is day's 'big downer' as it slashes jobs, revises guidance; oil sector holding its own

By Stephanie N. Rotondo

Phoenix, June 14 - Nokia Corp. was "one of the more notable ones," a distressed debt trader said Thursday.

Though technically a high-yield name - the bonds are rated Baa3/BB+/BB+ - the day's losses for the telecommunications equipment provider had even distressed players taking note.

The declines in the debt came as the company aims to cut up to 10,000 jobs by the end of 2013 in order to return to a more "sustainable" business, according to a press release.

The Finland-based company also lowered its second-quarter guidance.

Meanwhile, the oil sector continued to be a busy one. Petroleos de Venezuela SA debt was up a point on the day, while ATP Oil & Gas Corp. managed to hold its altitude, after losing 10-plus points in the last week.

A gain in the price of oil might have accounted for the day's decent performance in the sector, as there was no fresh news out on either company.

Nokia 'a big downer'

A trader said Nokia's debt was down over 6 points on the day on news of job cuts and revised quarterly guidance.

He pegged the 5 3/8% notes due 2019 at 76¾ and the 6 5/8% notes due 2039 at 78.

He noted that the latter issue was unchanged on the day.

"Nokia was a big downer," he said.

Another trader called the 2019 maturity down "6 points or so," seeing paper trading around 77.

A third trader deemed the notes down 5 points at 76¾ bid, 77 offered, on close to $20 million in trades.

On Thursday, the Epsoo, Finland-based smartphone manufacturer said it planned to axe 10,000 jobs, or 19% of its workforce, by the end of 2013 in an attempt to return to profitability.

The company also said that it was shuttering research centers and factories in Canada and Europe.

Nokia then revised its guidance for the second quarter, stating that its net loss would likely be larger than the $1.2 billion loss reported in the first quarter.

That loss was attributed to a 29% reduction in sales.

Also in the tech space, a trader said that Avaya Inc. paper "fell 3 to 5 points today - they apparently had a breakfast meeting, and it didn't go so well."

The Basking Ridge, N.J.-based computer networking, information technology and telecommunications company's 10 1/8% notes due 2015 slid to 83 bids, on more than $12 million traded. Its 9¾% notes due 2015 lost more than 4 points on the day to go home at 80¾ bid, on turnover of more than $6 million.

He also saw a little bounce-back in Alion Science & Technology Corp.'s 10¼% notes due 2015, which had fallen sharply late Tuesday and again on Wednesday to levels around the 30-31 mark from around 40 previously.

The McLean, Va.-based employee-owned research and development and information technology government contractor's bonds firmed from those lows, he said, to go out on Thursday at 34 bid.

PDVSA, ATP trade actively

PDVSA's 9% notes due 2021 were up a point, trading at 75, a trader reported.

About $19 million of the bonds were turning over, he added.

The trader also saw ATP Oil & Gas' 11 7/8% notes due 2015 holding its ground around 44 1/2.

A second trader called ATP's debt "basically unchanged" at 44 bid, 45 offered.

There was no fresh news out on either company Thursday. However, the price of U.S. crude oil rose $1.56, or 1.89%, to $84.18 per barrel.

Among other energy related names, a trader said Patriot Coal Corp.'s 8¼% notes due 2018 "continues to go lower," though he noted that there was "not much trading."

He pegged the notes in the high-30s.

Another market source called the issue down 4 points at 34 bid.

Broad market hangs in

Elsewhere in the distressed space, a trader placed MF Global Futures Ltd.'s 7¼% notes due 2016 around 38, while Ambac Financial Group Inc.'s debt - all of which tends to trade in line with one another - was around 23.

The trader also said that Eastman Kodak Co.'s second-lien notes - like the 9¾% notes due 2018 - were on the quiet side, but quoted marginally higher at 62½ bid, 63 offered.

Another trader said that Rotech Healthcare Inc. "took it on an ugly stick today, " seeing the Orlando, Fla.-based medical products and services provider's 10½% notes trading down to the 43-44 level, down 6 or 7 points on the day.

Paul Deckelman contributed to this article

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