Caesars bonds busy, NII continues rise; RadioShack up on investor stake, other retailers lag

By Paul Deckelman

New York, Jan. 22 - Caesars Entertainment Corp.'s 2018 notes were about the busiest bond in both the distressed-debt space and the broader junk bond market on Wednesday, participants said.

However, its price levels were not much changed, and no fresh news out on the gaming giant that might explain the activity surfaced.

Elsewhere, it was another busy day on the upside for NII Holdings Inc.'s bonds, which have recently been rising in brisk activity, helped by news announcements coming from the company, which sells Nextel wireless service in Latin America.

Verso Paper Corp.'s bonds moved up a little in moderately active trading. There was no fresh news out on the coated-paper manufacturer, which is trying to take those bonds out via an exchange offer as part of its acquisition of sector peer NewPage Corp.

In the retailing space, RadioShack Corp.'s bonds firmed smartly, although there was little in size trading going on, in line with a stock surge on the news of hedge-fund Litespeed Management LLC's having taken a sizable stake in the electronics retailer.

But other retailing names, including Sears Holdings Corp. and J.C. Penney Co. Inc., were seen on the downside.

Caesars seen active

A trader said that the Caesars 10% notes due 2018 - really, the legacy bonds issued by predecessor corporate entity Harrah's Entertainment Inc. - were actively traded.

"I did see a lot of that stuff cross," he acknowledged. "It looks like they're up at the top of the [Most Actives] charts, with close to $30 million traded, and, counting all of the smaller odd-lot trades as well as the round-lot transaction, "probably way over that."

He saw the bonds ending around 51¾ bid, after most of the day's trades took place between 51 and 52. He characterized those levels "about unchanged over the last few days -unchanged, but on a lot of volume."

He saw no fresh news out on the Las Vegas-based gaming giant that might explain the activity in the bonds, adding that with the company's other paper not trading particularly actively on Wednesday, "the 10%, for whatever reason, was the hot hand today."

A second trader agreed on the lack of any particular news that might be driving trading in the 10s, which he called "pretty active" in a 51½ to 51¾ context, although he noted that "for the most part, that's where it has been," or "maybe, a smidge better."

The issue "is always pretty active."

NII stays busy

A trader said that NIHD Holdings, Inc.'s bonds were once again active on Wednesday, just as the Reston, Va.-based telecommunications company's paper had been on Tuesday, and over several of last week's sessions.

He said that its NII Capital Corp. 10% notes due 2016 were "pretty active" in a 65 to 66 context, commenting that the notes "had dropped down into the low 50s for a while, at the end of last year, but in January, it came to life and went from the mid-50s to where it is now."

The trader added that on Wednesday, "it was pretty much unchanged" from where it had been on Tuesday, trading at bid levels between 65½ and 661/2. He estimated volume at between $12 million and $15 million.

He said that the company's 7 5/8% notes were pretty much unchanged on the day, trading between 45¼ and 46¼ bid, on volume of between $9 million and $10 million.

"NIHD continues to trade," a second market source asserted, quoting the 7 5/8s about unchanged from where they had been, around "46-ish." Meanwhile, he saw the 10s between 66 and 67 during the afternoon, "so call it up a couple of points."

He noted recent news announcements coming from the company, which sells Nextel wireless service, including its popular push-to-talk function, in Mexico and several other Latin American countries.

On Monday, it said that its PRIP Push-to-Talk app would be available on iPhones in the United States, where push-to-talk, formerly offered by Sprint Corp., which bought Nextel several years ago, was discontinued when Sprint abolished the legacy Nextel platform and migrated its former customers over to its own operating system. NII, meanwhile, already has a version of the app out that is compatible with the popular Android wireless phones.

That was the third significant announcement in the past 10 days from NII. On Friday, it declared that it had entered into an agreement with Apple Inc. that will allow NII to offer the Apple iPhones 5S and 5C to its Nextel customers in Brazil as early as the end of this month.

And last Monday, NII said it had inked a pact with Spanish telecom company Telefonica SA that will let it use Telefonica's existing 3G networks in Mexico and Brazil, saving itself the necessity of a costly infrastructure build-out to reach remote customers.

The trader said the new app news, "coupled with the Telfonica news from a week ago, is what has been driving the bonds."

At another desk, the NII 10s were quoted at 65¾ bid, which was called unchanged on the day, with over $10 million having changed hands.

Verso paper moves up

Verso Paper's 8¾% second-priority senior secured notes due 2019 were seen by a market source as having risen some 2½ points on the day, to 50 7/8 bid.

However, a source at another desk said that throwing out the unrepresentative odd-lot transactions, that price only represented a 3/8 point gain on the session, on volume of over $6 million.

No fresh news was seen out on the Memphis-based coated paper company, which is in the process of acquiring sector peer NewPage Corp. As part of that acquisition, it recently began an exchange offer for the $396 million of those outstanding bonds and for its $142.5 million of 11 3/8% senior subordinated notes due 2016. It will exchange new second-lien paper for the 8¾% notes and new subordinated bonds for the 11 3/8s. The offer has a Jan. 27 early tender deadline and expires on Feb. 10.

RadioShack on the rise

A trader said that RadioShack's 6¾% notes due 2019 "were a little better," quoting that paper trading at 60 bid, which he called up by more than 1 point.

Another trader said the Fort Worth-based electronic retailing chain store operator's notes were up by as much as 1¾ point on the day, at 60 5/16 bid.

And at another desk, the bonds were pegged up by some 1 7/16 point, at 60 bid, on round-lot volume of over $3 million.

The bonds firmed alongside RadioShack's New York Stock Exchange-traded shares, which zoomed by 38 cents, or 17.59%, to close at $2.54. Volume of 9.9 million shares was more than four times the norm.

The stock jumped on news reports indicating that hedge-fund Litespeed Management LLC had taken a passive 8.1% stake in the company.

While RadioShack was hot, other retailers were not. A trader saw Sears Holding and J.C. Penney trading on the downside, with Hoffman Estates, Ill.-based department store operator Sears' 6 5/8% notes due 2018 off 1½ points at 88 bid, while its Plano, Texas-based sector peer Penney's 5.65% notes due 2020 lost nearly 1¼ points to end at 74 5/16 bid.

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