Kodak bonds decline as patent auction deadline postponed; Momentive weakens; ATP, Axtel steady

By Stephanie N. Rotondo

Phoenix, Aug. 14 - Distressed bonds were "basically unchanged," a trader reported Tuesday.

But not all credits were following the day's trend.

Eastman Kodak Co.'s debt dropped again, after the company said late Monday that it was extending the auction deadline on its patent portfolio.

Kodak said it was still in talks with bidders, but did not give an expiration on the extension.

Meanwhile, Momentive Performance Chemicals Inc. was also on the downslide. On Monday, the company saw its rating slashed by Standard & Poor's.

Of the names moving in line with the trend of the day, ATP Oil & Gas Corp. was holding in, despite any word on a supposed looming bankruptcy filing. Axtel SAB de CV was also steady, though Reuters reported the Mexican telecommunications company was looking into asset sales.

Kodak postpones auction deadline

Eastman Kodak paper dipped Tuesday, as investors pondered what an auction deadline extension means.

One trader said the 10 5/8% notes due 2019 fell to 67½ bid, 68½ offered from 71½ bid, 72½ offered previously. The 9¾% second-lien notes due 2018 meantime lost 3 points to close at 67 bid, 68 offered, as the 7¼% notes due 2013 held in at 11 bid, 12 offered.

Another market source pegged the 7¼% notes at 12 bid.

A third trader said the 7% convertible notes due 2017 were "pretty active," trading in a 10 to 11.25 range.

"They seem to be holding there," he said. "Guess that's peoples' thoughts on a reorganization, maybe what they'll be getting."

The equity traded up nearly 3 cents, or 13.86%, to 23.9 cents.

The bankrupt Rochester, N.Y.-based company's patent portfolio auction was set to expire at 5 p.m. ET on Monday. However, the company then came out to say that it was extending the deadline, as it was still in negotiations with potential bidders.

However, Kodak did not give an exact length of time for the extension.

Also late Monday, Kodak posted business projections, which indicated that top-line revenue growth would bottom in 2012 and begin growing again in 2013.

The company also said its bottom line would improve in 2013.

Momentive loses momentum

A trader said Momentive Performance Materials' 9% notes due 2021 "were off nearly a point" at 701/4.

The slip came one day after S&P downgraded the specialty chemical company to "CCC" from "B-."

S&P gave the ratings a negative outlook and said its liquidity assessment was "weak."

The rating agency contended that earnings and cash flow will remain subdued in the near term, due to oversupply and an overall weak economy. S&P also said that leverage was "unsustainably high."

Momentive is based in Albany, N.Y.

No filing yet for ATP

ATP Oil & Gas' 11 7/8% notes due 2015 were deemed "kind of unchanged" at 341/2, according to a trader.

The 8% convertible series B perpetual preferred shares (OTCBB: ATPGP) gained 35 cents, or 10.77%, to close at $3.60.

The stock was 6 cents, or 13.9%, higher at 49 cents.

"We're still waiting for these guys to file bankruptcy or make some offer on the bonds so they can avoid bankruptcy," a trader said.

Last week, the Houston-based offshore oil drilling company was reported to have secured a debtor-in-possession loan from Credit Suisse Group AG. A Chapter 11 filing was expected over the weekend but has yet to come.

Axtel ponders asset sales

Axtel's 9% notes due 2019 were seen holding in around 55, even as news outlets reported that the company was looking into potential asset sales.

Reuters reported early Tuesday that it was looking at opportunities to raise cash quickly in an effort to speed up investment plans. The options included asset sales - of its transmission antennas or of fiber optic cable - or seeking outside investment.

The company is also looking at alliances with third parties.

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