MF Global bonds fall; NewPage paper pressured; broad market mixed as focus shifts to new issues

By Stephanie N. Rotondo

Portland, Ore., Jan. 27 - Investors took a breather from distressed debt on Friday, focusing instead on new issues and the goings-on in Greece and Europe.

"Everything just kind of went into 'nothing' mode," a trader said. "It was mostly new issues."

MF Global Holdings Ltd. saw its debt falling a couple points, according to a trader. Next week, the firm's former risk officer is expected to testify before a congressional panel regarding his concerns about the bankrupt company's exposure to European risk.

Also lower were NewPage Corp.'s first-lien notes, though there was no fresh news out to act as a catalyst.

MF Global sinks

MF Global's 7¼% notes due 2016 fell "a couple points" to 35½ bid, 36 offered, according to a trader.

The losses came as market players waited to see what Michael Roseman, the firm's former chief risk officer, would say at a hearing before the House Financial Services Committee on Thursday.

Roseman left the company in early 2011 and was replaced by Michael Stockman. Stockman is also scheduled to appear before the panel.

The committee is looking into what the role of the risk officers and ratings agencies was in the demise of the company. Roseman is said to have warned the company and its board about its exposure to European sovereign debt risk, though he has yet to publicly give his side of the story.

The New York futures broker formerly run by Jon S. Corzine filed for bankruptcy on Oct. 31. Investigators are also looking into where more than $600 million of client funds has gone and whether or not the firm used said funds inappropriately.

NewPage falls down

NewPage' 11 3/8% notes due 2014 slipped to 661/2, a trader said.

Another trader called the paper "a little lower" at 66 bid, 67 offered.

There was no fresh news out on the Miamisburg, Ohio-based bankrupt papermaker.

Broad market mixed

Also in the distressed space, Dynegy Holdings LLC's 8 3/8% notes due 2016 fell to 601/2, a trader reported.

Another trader said that Eastman Kodak Co.'s 7¼% notes due 2014 were "a little better" at 28 bid, 29 offered.

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