Bon-Ton rises as sales expected to be better; Nortel Networks active; Travelport falls

By Stephanie N. Rotondo

Portland, Ore., March 27 - Bon-Ton Stores Inc. was the distressed debt nom du jour Tuesday, despite a lack of credit-specific fresh news out to act as a catalyst.

"Bon-Ton continues to move higher," a trader said, while another speculated that a March sales report out from Redbook Research was giving investors a bit of optimism.

Meanwhile, Nortel Networks Corp.'s debt "has been more active" recently, a trader said. Though he deemed the bonds unchanged on the day, he noted that they were down from recent highs.

And, Travelport LLC's paper continued to lose ground. In the last month or so, the bonds had been steadily climbing higher. But after reporting earnings last week, the debt has been drifting downward ever since.

Bon-Ton bonds better

A trader said Bon-Ton Stores' 10¼% notes due 2014 "seem to be climbing up."

He saw about $21 million of paper changing hands, closing around the 88 1/8 mark. That compared to 87 bid the day before.

Another trader also placed the issue around 88.

According to the latest report published by Redbook Research, national chain store sales for March were up 0.5%. Expectations were that sales would be up 0.4%.

The report stated that sales were higher due to seasonal and Easter demand, as well as spring breaking students.

Bon-Ton is a York, Pa.-based retailer.

Nortel ramps up action

Nortel Networks' bonds "have been more active," according to a trader, as the Toronto-based bankrupt telecommunications products company's bankruptcy case continues to drag on.

The trader said the 10¾% notes due 2016 were unchanged on the day at around 1131/4, though he said that was down from the recent highs of 114 bid, 114½ offered.

Another trader said buyers continued to seek the paper, also pegging the debt at "113-ish."

The company filed for bankruptcy on Jan. 14, 2009 and since then has sought to wind down operations. The recent uptick in activity in the bonds has resulted in some opining that maybe the case is getting ready to wrap up.

Travelport retreat continues

Travelport debt continued to weaken during Tuesday trading, according to market sources.

One trader saw the 11 7/8% notes due 2016 falling 1½ points to 331/2. Another trader called the 9 7/8% notes due 2014 "probably down a little bit more" at around 64.

He called that down about a point on the day.

As previously reported, the bonds had been on the rise until Thursday, when the notes posted declines on the back of the company's earnings release.

For the fourth quarter, the Atlanta-based travel services company reported revenues of $465 million, a 3% increase year over year. Revenues for the full year rose 2% to $2.04 billion.

However, the loss for the fourth quarter was higher at $82 million, versus $69 million the year before. For the year, profit was $175 million.

Strength in distressed bonds

Elsewhere in distressed trading, a trader said Edison International Inc.'s 7½% notes due 2013 were a point higher at 831/4.

At another desk, a trader said AMR Corp.'s unsecured notes - such as the 6¼% notes due 2014 - were "up a little bit" on news the company was seeking to cancel its union contracts.

He placed the notes around 451/2.

And, Circus and Eldorado Joint Venture's 10 1/8% notes that were to have matured March 1 were a "little bit stronger" at "82-ish bid."

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