Sears, Claire's gain despite weak earnings; rue21 up ahead of investor call; NII debt declines

By Stephanie N. Rotondo

Phoenix, May 22 - A distressed debt trader said "some retailers were moving around" during Thursday's session.

Sears Holdings Corp. put out earnings during the session. Despite disappointing numbers, the bonds were on the rise.

Claire's Stores Inc. meantime released quarterly results late Wednesday. Those bonds were up as much as 4 points on the day.

Elsewhere in the retail sector, rue21 Inc. held an investor conference call after the market closed on Thursday to discuss the company's first quarter numbers. Though the numbers were not released to the public ahead of time, the company's debt was rising ahead of the call.

One trader said the 9% notes due 2021 were "a lot better," moving up to 66 from 60.

Another trader noted that the debt has "been drifting down over the last couple of months." Early in the session, he saw the bonds hitting a low of 59 bid, 61 offered. However, the paper then bounced in the after to a 65 to 66 context, "almost a 10% move."

The trader noted that the $250 million issue priced in October, "so it's only six or seven months old - but to be trading down that much is something."

Sears rises despite numbers

A trader said Sears Holdings' bonds began the trading day lower, but moved up by the close, despite reporting a wider first-quarter loss.

The trader pegged the 6 5/8% notes due 2018 at 921/4, up a quarter point.

For the quarter, the Hoffman Estates, Ill.-based company posted a loss of $402 million, or $3.79 per share. That compared with a loss of $279 million, or $2.63 per share, the year before.

Excluding certain items, loss was $2.24 per share.

Revenues declined 7% to $7.88 billion.

The revenue loss was attributed in part to there being fewer stores open.

Additionally, the company said that it could close more than the 80 stores it plans to shutter this year.

Claire's up post-earnings

Chicago-based Claire's Stores put out its first quarter earnings late Wednesday. Though those numbers were not too stellar either, those bonds perked up as well.

A trader called the 8 7/8% notes due 2019 up over 2 points at 861/4. A second trader placed the issue around 86, compared with an 82 to 83 context previously.

For the first quarter, net sales were down fractionally at $353.3 million. Same-store sales were down 4.4%.

Net loss was $38.1 million and adjusted EBITDA was $48.1 million.

NII in retreat

NII Holdings Inc.'s bonds were "weaker again," a trader said.

He saw the 10% notes due 2016 at 28½ and the 7 5/8% notes due 2021 at 261/2.

Another trader said the 8 7/8% notes due 2019 were down slightly at 40, while the 7 5/8% notes lost over a point to close around 26 3/4.

NII is a Reston, Va.-based provider of Nextel mobile phone services in Latin America and Mexico.

Paul Deckelman contributed to this article

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