Clear Channel debt mixed on tighter loss, flat revenue; Sears hangs in ahead of earnings issue

By Stephanie N. Rotondo

Portland, Ore., Feb. 21 - The distressed debt market was experiencing a bit of a three-day weekend hangover, traders reported Tuesday.

"The market didn't seem to do much," one trader said.

Another trader said that most of the activity remained new issue-centric, but added that even activity in that arena was less than it has been of late.

"There's not a lot of volatility, not a lot of selling," he said.

Clear Channel Communications Inc.'s debt was on the active side but mixed after the company reported earnings. Sears Holdings Corp. was meantime unchanged to modestly higher ahead of its earnings release later this week.

Elsewhere, a trader said Eastman Kodak Co. paper was weakening, noting that the company's credit default swaps auction is slated for Wednesday.

Clear Channel mixed on numbers

A trader said Clear Channel Communications' 10¾% notes due 2016 were up "almost a point" at 77 1/8, while the 11% notes due the same year were flat around 75.

Another source called the 10¾% notes down from opening levels around 78½ at 76. The 11% notes were deemed unchanged at 75.

San Antonio-based CC Media Holdings Inc. - the parent company of Clear Channel - reported a $43 million loss for the fourth quarter on revenues of $1.6 billion.

The loss narrowed from $62.7 million the year before and revenues were flat.

For the year, net loss was $302 million on $6.16 billion in revenues. That compared to a net loss of $479 million on revenues of $5.87 billion in 2010.

"By executing our strategy, we delivered a solid 5% increase in revenues for the full year," said Tom Casey, chief financial officer, in the earnings release. "Combining this revenue performance with effective cost management initiatives enabled us to improve our overall operating profit margin in 2011 despite a sluggish economy. We also continued to invest strategically in the company, while successfully managing our debt maturity profile and liquidity."

Sears steady ahead of earnings

Hoffman Estates, Ill.-based retailer Sears Holdings is slated to announce numbers later this week. On Tuesday, the company's bonds were trading somewhat better than they were on Friday, according to sources.

One source pegged the 6 5/8% notes due 2018 up three-quarters at 861/2. Another source called the issue slightly firmer to unchanged from Friday levels and unchanged from early morning levels at 86.

Sears has been struggling to maintain recently. During its last quarterly conference call, the company said it was shuttering about 200 stores and as recently as last week said it was laying off about 100 employees at its corporate headquarters.

On top of those cuts, CIT Group Inc. has halted loans and payment guarantees to vendors of the company.

The stock (Nasdaq: SHLD) fell $3.59, or 6.58%, to $50.94 in Tuesday trading.

Kodak dips pre-auction

A CDS auction for Eastman Kodak is scheduled for Wednesday, a trader said.

Ahead of the auction, he saw the 7¼% notes due 2014 falling 2 to 2½ points to 27.

There was no other fresh news out on the Rochester, N.Y.-based bankrupt company.

AMR flies steady

A trader saw AMR Corp.'s 6¼% notes due 2014 pretty much unchanged, despite a general softening in airline stocks on Tuesday, including Fort Worth-based AMR, driven by investor fears about the impact of higher fuel prices on the carriers. He saw those bonds at 30-31, on "not much volume."

He saw the bankrupt airline giant's 7½% notes due 2016 finishing at 84 bid, 85½ offered, but he said he did not see much activity in the credit.

He saw AMR's 9% debentures scheduled to come due on Aug. 1 and its 6¼% convertible notes due 2014 both trading right around a 30-33 context.

"I can't say that I've seen much activity in it," he said."

Broad market modestly higher

Elsewhere in the distressed space, a trader said ATP Oil & Gas Corp.'s 11 7/8% notes due 2015 were half a point higher at 641/4.

Another trader said NewPage Corp.'s 11 3/8% first-lien notes due 2014 firmed a bit, "but I didn't see anything trading."

He pegged the notes around 571/2.

The trader also saw General Maritime Corp.'s 12% notes due 2017 trading around 11/2.

Paul Deckelman contributed to this article

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