Distressed market sees NII continuing to be active, Caesars trading; RadioShack remains firm

By Paul Deckelman

New York, Jan. 23 - NII Holdings Inc. remained a busy name in the distressed space on Thursday, although the recently robust bonds were seen to have come in a little. That was in line with a generally lower high-yield bond market, which seemed to take its cues from falling stocks.

There was also a fair amount of activity in Caesars Entertainment Corp.'s 2018 notes, although volume was down from Wednesday's very busy pace.

Among the retailers, RadioShack Corp.'s bonds continued to firm, helped by news that a hedge fund had taken a sizable stake in the electronics chain store company.

Fellow retailer Sears Holding Corp.'s bonds were also seen up, though sector peer J.C. Penney Co. Inc. continued to lose ground.

Also on the downside was restaurant chain operator Logan's Roadhouse Inc.'s bonds, though on no fresh news.

In the convertibles market, Molycorp Inc.'s and Endeavour International Corp.'s notes were seen better.

NII bonds stay busy

A trader said that NII Holdings' 10% notes due 2016 remained in a 66 to 67 bid context, with the last trade at 661/2, "pretty much where they traded all day," although he allowed that "maybe that's down a little bit."

At another desk, a trader also saw those bonds, issued by the Reston, Va.-based company's NII Capital Corp. subsidiary, going out at 66½ and pegged them down ½ point on the session.

He saw volume in excess of $15 million in the credit, putting it high up on the Most Actives list for Thursday.

The first trader meantime agreed that "that's the one I see come across more than the other issues on NII." Counting smaller odd-lot dealings, he said that over $20 million had changed hands.

He also saw its 7 5/8% notes due 2021 sticking around their recent levels in a 45 to 46 bid context.

The bonds have recently been given a boost by several 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 has 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.

Caesars volume moderates

A trader said that Caesars Entertainment's 10% notes due 2018 "were certainly active yesterday [Wednesday]. We saw a lot less today." He pegged Thursday's volume in the area of $9 million or $10 million, versus more than $25 million on Wednesday.

He saw those notes - issued by the Las Vegas-based gaming giant's corporate predecessor company, Harrah's Entertainment Inc. - holding steady around the 51 bid level, where they had been on Wednesday, "pretty much unchanged."

RadioShack rise continues

For a second straight session, RadioShack's 6¾% notes due 2019 were in the spotlight on Thursday, with a trader quoting the Fort Worth, Texas-based electronics retailer's paper as having moved into the lower 60s, which he called "up a point or so over the last few days."

On Wednesday, the bonds were seen having risen to around the 60 bid level, in line with a rise in the company's shares generated by news reports indicating that hedge fund Litespeed Management LLC had taken a passive 8.1% stake in the company.

"It's always nice to have somebody who cares about the stock," he declared, "even though it's not much of a stock" trading down in the $2.50 range.

"So the bonds edged up."

Also in the retailing space, a market source said that the Hoffman Estates, Ill.-based department store operator Sears Holdings' 6 5/8% notes due 2018 bucked the generally negative trend to gain 5/8 point and go home at 90½ bid.

However, its Plano, Texas-based sector peer, JCPenney, saw its 5.65% notes due 2020 down ¾ point on the session, ending at 74½ bid. That followed Wednesday's downturn of nearly 1¼ points in the Penney bonds.

Toys 'R' Us Inc.'s 10 3/8% notes due 2017 were trading at 83½ bid - up 1 point on the day from Wednesday's close, though unchanged versus its last previous round-lot transaction. Volume in the Wayne, N.J.-based toy and game retailer's bonds was over $2 million.

Roadhouse blues

A trader said that Logan's Roadhouse's 10¾% notes due 2017 were down some 1½ points on a round-lot basis at 68¼ bid and down more than 4 points overall from Wednesday's levels. Volume was over $4 million.

There was no fresh news out about the Nashville-based restaurant chain operator.

Distressed bonds quiet

All told, though, a trader said that "there wasn't a whole lot new or exciting" on Thursday in trading among the bonds of distressed or underachieving companies.

Molycorp, Endeavour active

In the convertibles market, several names were fairly active on Thursday.

There were bidders in Molycorp's 3.25% convertibles, and that bond was up about 0.5 point to 76.5 on the day. A trader called the Greenwood Village, Colo.-based rare earth and strategic metals producer's paper "better to buy."

Endeavour International's 5.5% convertibles were trading mostly in line with the underlying shares of the Houston-based oil and natural gas company, adding about a point from previous trades, a trader said, adding, "They were busy."

Rebecca Melvin contributed to this review

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