Clear Channel reports second-quarter results, bonds jump; Supervalu debt recovers lost ground

By Stephanie N. Rotondo

Phoenix, Aug. 1 - It was another strong day for distressed debt in terms of price movements, though volume was muted due in large part to recent high-yield issues.

Clear Channel Communications Inc. was "way up," according to a trader, seeing the bonds gain at least 5 points on the day. The upward momentum was based on the company's second-quarter results.

Elsewhere, Supervalu Inc. was also trending higher. The name has been slowly creeping back up since Monday, when the company announced it had ousted its chief executive and replaced him with its chairman.

MF Global Futures Ltd. meantime was "totally quiet," a trader said, even as the bankrupt firm's trustees testified before the Senate Agriculture Committee.

Clear Channel jumps post-earnings

A trader said Clear Channel Communications' paper was "way up," though on "minimal trades."

He called the 11% notes due 2016 up nearly 5 points at 62, while the 10¾% notes due 2016 rose nearly 6 points to 633/4.

For the second quarter of 2012, the San Antonio-based multimedia company posted revenues of $761 million, down from $789 million the year before. Excluding the effects of foreign-exchange rates, revenues would have risen 1%.

Net loss was $8 million, or 4 cents per share, versus a profit of $27 million, or 7 cents per share, for the same quarter of 2011.

As of June 30, cash flow from operations was $65 million.

Supervalu coming off bottom

Supervalu's debt "has been trending up from the bottom," a trader said.

He called the 8% notes due 2016 up a point to 871/2.

Another market source deemed the issue up almost a point at 87¼ bid.

The struggling Minneapolis-based grocery store operator has seen its bonds slowly inching upward since news out on Monday regarding a management shakeup. Supervalu said on Monday that it had fired Craig Herkert on Sunday, tapping its chairman Wayne Sales to lead a turnaround effort. The news gave investors confidence that perhaps the company could in fact turn around and the bonds began to push higher.

MF Global unshaken

A trader said he was "surprised" that there were little goings-on in MF Global Futures' debt Wednesday, given that the bankrupt firm's trustees were testifying before a Senate panel.

The trader said the 6¼% notes due 2014 were trading at 441/2, which was, at best, up marginally.

"I thought they would have been up 4 to 5 points," he said. "But they were totally quiet.

"Maybe a lot of that information was already factored in," he surmised.

The information he was referring to was from comments made by Louis Freeh, a former FBI director and the trustee charged with winding down the firm's business. Testifying in front of the Senate Agriculture Committee, Freeh said that he was confident that MF Global's customers would eventually be made whole.

The New York-based futures brokerage filed for Chapter 11 protections after it was discovered that about $1.6 billion in client funds had been misplaced and/or misused.

But James Giddens, the trustee that is attempting to find all of the missing funds, said that while his goal was to get all the money back into the right hands, it could be quite a long time until that happens.

Giddens also said that the evidence suggested management at MF Global - including Jon Corzine - was aware that client funds were being used to inappropriate purposes.

Broad market bits

In the rest of the distressed arena, a trader said RadioShack Corp.'s 6¾% notes due 2019 "kind of stabilized," falling just slightly to 633/4.

Another trader said Eastman Kodak Co.'s 9¾% second-lien notes due 2018 were "up a bit" to 80 bid, 81 offered, while the 7¼% notes due 2013 were firming a touch to 23 bid, 24 offered.

NewPage Corp.'s 11 3/8% first-lien notes due 2014, however, were a tad weaker, trading around 67.

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