Travelport, Bon-Ton move around, no catalyst; PDVSA mixed as investors ponder Chavez's health

By Stephanie N. Rotondo and Paul Deckelman

Portland, Ore., April 23 - It was a weak-toned day for distressed debt on Monday, though investors were continuing to focus on higher-rated credits.

"There wasn't much on the upside," a trader said.

In distressed dealings, Travelport LLC and Bon-Ton Stores Inc. remained actively traded, though on no fresh news. Travelport, for its part, was continuing to inch upward, while Bon-Ton was coming in.

Meanwhile, PDVSA dominated trading in the secondary realm, as speculations about Venezualan leader Hugo Chavez's health intensified. Still, the oil company's debt finished the day mixed.

Travelport moves higher

A trader said Travelport's 11 7/8% notes due 2016 gained over half a point to end at 33 5/8.

He added that about $7 million of the bonds traded.

"That's decent size for them," he said.

Another trader placed the issue at 331/2. However, when asked why Travelport has been active and better of late, the trader had no explanation.

Travelport is an Atlanta-based travel services provider.

Bon-Ton loses footing

Bon-Ton Stores' 10¼% notes due 2015 were "a little bit weaker," according to a trader, who saw them trade "as low as" 82.

Another trader called the notes down a deuce, also at 82.

There was no fresh news out on the York, Pa.-based retailer.

PDVSA ends mixed

PDVSA bonds were dominating trading volume Monday, as investors speculated on Venezualan President Hugo Chavez's health.

Still, the bonds ended mixed, a trader said.

The 8½% notes due 2017 inched up a touch to 87 3/8, with about $35 million changing hands. The 9% notes due 2021 were unchanged at 791/4, on about $25 million traded. And, the 5 3/8% notes due 2027 fell over a point to 593/4, on about $19 million traded.

PDVSA is a state-owned oil company and Chavez's recent battle with cancer has led some to think that there soon could be a change in government. If that does happen, the new government might look to end policies that have nationalized companies such as PDVSA and try to curb inflation.

Colt paper falls

A trader said that Colt Defense LLC's 8¾% notes due 2017 "traded all the way down to 64, late in the day - that's definitely down a couple of points." He said that the bonds had previously traded in a 67-69 context.

At another desk, a market source said that the Colt bonds finished at 64 3/8 bid, down from Friday's close at 64, and down still further from the bonds' most recent previous round-lot level, at 681/2, on Thursday. About $3 million of the notes changed hands.

The West Hartford, Conn.-based company supplies firearms and ammunition to law enforcement agencies and the U.S. military; its bonds fell in apparent response to an article in Military Times, a defense contracting industry trade publication, which reported that the Pentagon, which up till now has been exclusively buying its widely used M4 carbine from Colt, has decided to diversify its source of supply for the weapon, placing an order for thousands of the guns with Colt rival Remington Arms, part of Madison, N.C.-based Freedom Group Inc. The story was not confirmed by either the company or by the Pentagon.

However, there was no fresh trading seen in the latter company's bonds, even including the $250 million of 7 7/8% senior secured notes due 2020, which priced at par back on April 12, moved up to around the 102-to-102½ level in subsequent aftermarket trading, and then faded from view.

Broad market wishy-washy

Among other distressed issues, Edison International Inc.'s 7 5/8% notes due 2027 dropped 1½ points to 581/4, according to a trader.

Another trader said that Eastman Kodak Co.'s 9¾% notes due 2018 "seemed a little bit better" at 87½ bid, 88 offered.

Exide Technologies Inc.'s 8 5/8% notes due 2018 meantime were "drifting a little bit lower," ending around 79.

And, Hawker Beechcraft Acquisition Co. LLC's 8½% notes due 2015 were firmer at 141/2. That compared to 10½ bid, 11 offered "about a week and a half ago," the trader said.

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