Sprint Nextel closes mixed; Springleaf paper moving up; Hawker numbers dismal; market holds in

By Stephanie N. Rotondo

Portland, Ore., April 16 - Distressed debt was moderately firmer Monday, though "nothing was really flying pricewise," a trader said.

Sprint Nextel Corp. was actively traded, but mixed on the session. There was no news out to prompt the activity.

Meanwhile, Springleaf Finance Corp. paper was busy and modestly higher. The bonds have been on the rise of late, likely due to a securitization that took place last week, a trader said.

Hawker Beechcraft Acquisition Co. LLC reported earnings late Friday, after saying on April 2 that it needed more time to get the filing done. The company's senior debt was unchanged on the earnings, though the bank debt continued to weaken.

Sprint ends mixed

A trader said Sprint Nextel paper was "very active" Monday, though on no news to act as catalyst.

He called the 6.9% notes due 2019 down nearly half a point on about $16 million traded at 86 5/8.

However, another market source pegged the 6% notes due 2016 up slightly at 89¾ bid.

A third trader said that the 6.9%notes "had some activity today." He saw the paper ending down around three-quarters of a point at 86 3/8 bid, on volume of around $20 million, making the Sprint issue one of the busiest of the day in junk bond land. "They had some activity," he declared. He said, "That was the one I saw with the most activity - at the top of the charts."

Sprint is an Overland Park, Kan.-based wireless telecommunications provider.

Springleaf on the rise

Springleaf Finance's shorter-dated paper was modestly boosted in Monday trading, according to a trader.

"They did some kind of securitization," he said, referring to a $260.2 million sale of top-rated mortgage securities sold by the company last week. "I think the sense is that the shorter paper will be taken care of."

He saw the 5 3/8% notes coming due this year at 99, up half a point and the 4 7/8% notes also due this year up a quarter at 991/4.

Between the two, he said, yields were anywhere from 7½% to 7¾%.

"That's the tops of where they have traded in a while," he said.

The Evansville, Ind.-based lender has been looking to raise cash recently, as it wants to avoid a default on the upcoming maturities.

Springleaf was formerly known as American General Finance Inc., a unit of American International Group Inc. Fortress Investment Group LLC purchased 80% of the company from AIG in 2010.

Hawker earnings disappoint

Hawker Beechcraft reported its fourth-quarter and end of year results on Friday. Despite the dismal figures, the company's bonds were unchanged, though the bank debt continued its downward spiral, a trader reported.

He saw the senior issues - the 8 7/8% and 8½% notes due 2015 - "kind of unchanged" around 111/2.

But the strip of institutional debt was "down a little bit, a point or so." He quoted the debt at 62½ bid, 63 offered.

The Wichita, Kan.-based aircraft manufacturer and reseller reported a loss of $632.8 million on sales of $2.44 billion for fiscal 2011. That compared to a loss of $304.9 million on sales of $2.8 billion in 2010.

As of Dec. 31, the company had $2.33 billion in debt.

Furthermore, the company warned that its ability to continue as a going concern was in question.

In a statement released Friday, Robert S. "Steve" Miller, chief executive of Hawker, said the numbers reflect "the combined effect of the prolonged weakness in our market that has continued to affect our business and the heavy debt burden the company has operated under since 2007. Hawker Beechcraft continues to work closely with our lenders to restructure the company's balance sheet, and to do so as quickly as possible."

Miller also said that an announcement on its restructuring should be forthcoming within the next few weeks.

Bonds holding in

Among other distressed issues, a trader said Dynegy Holdings LLC's 8 3/8% notes due 2016 were up slightly in light trading at 641/2.

Another trader called NewPage Corp.'s 11 3/8% first-lien notes due 2014 "about the same" around 67.

The second trader also saw Ahern Rentals Inc.'s 9¼% notes due 2013 trading around 60.

"I haven't seen that in awhile," he remarked.

Paul Deckelman contributed to this article

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