ResCap bonds inch up; Clear Channel gains mounting; energy names seen slipping; Tribune higher

By Stephanie N. Rotondo

Phoenix, Sept. 11 - Distressed debt remained strong Tuesday, though a round of new high-yield issues took focus away from that part of the market.

Residential Capital LLC's bonds were modestly higher on the day. The company won the exclusive right to file a reorganization plan through mid-December on Tuesday. However, the company had been seeking to extend its deadline through early to mid-2013. The judge overseeing the case declined to allow that long of an extension, expressing exasperation at how long the case has dragged on.

Elsewhere, Clear Channel Communications Inc.'s ascent continued into Tuesday's trading session. The bonds have been climbing steadily of late, but there has been no catalyst to explain why.

In the energy sector, many names were seen on the decline, such as ATP Oil & Gas Corp. and Edison International Inc. There was no news to prompt the weakness.

ResCap modestly better

Residential Capital won the exclusive right to file a plan of reorganization through Dec. 20 on Tuesday, but the judge overseeing the case said he intended to keep the company "on a tight leash."

Judge Martin Glenn reprimanded the bankrupt company, stating that the pace of the case was way too slow and said that cooperation with creditors' committees was not up to snuff.

The comments seemed to buoy bond investors, who pushed up the Minneapolis-based company's debt modestly.

A trader saw the 6½% notes due 2013 were half a point higher at 26, while the 9 5/8% notes due 2015 inched up to 991/4.

ResCap had originally sought to extend the exclusivity period to March 2013, but Martin was not having it.

"I want to keep tight reigns on all of you," he said at Tuesday's court hearing. "I want to see that you're making progress or at least making an effort to make progress."

Clear Channel remains strong

A trader said that Clear Channel Communications' bonds "continue to move higher," though there has been no fresh news to explain why the debt has been on the rise.

"Everything in the whole structure is moving up a point or two," the trader said, seeing both the 10¾% and 11% notes due 2016 around 70.

Another trader said there was "pretty heavy" trading in the name. He called the 10¾% and 11% notes up 1¾ to 2 points on the day, with both ending at 701/4.

Clear Channel is a San Antonio-based multimedia company.

Energy powers down

The energy sector was generally weak, at least in distressed names, despite a lack of news to drive the losses.

ATP Oil & Gas' 11 7/8% notes due 2015 were called down over half a point at 251/2, according to one trader. Another trader quoted the paper at 25½ bid, 26 offered.

"They were slightly better than that yesterday," he said.

Edison International debt was also softer.

One trader said the company's bonds all traded down to levels around 50, which he called down "as many as 3 points."

Another trader said the credit was "active and a bit weaker, trading just below 50."

Meanwhile, Patriot Coal Corp.'s 8¼% notes due 2018 dipped to a 45-46½ context, according to a trader.

Tribune loan gains

Tribune's Co.'s bank debt was better in the secondary market on Tuesday with news of the dismissal of an appeal by Aurelius Capital Management to stay the company's emergence from Chapter 11, according to a trader.

The term loan B was quoted at 76¼ bid, 77¼ offered, up from 75¾ bid, 76¾ offered, the incremental term loan and term loan X were quoted at 76 bid, 77 offered, up from 75¼ bid, 76¼ offered, and the revolver was quoted at 79½ bid, 81½ offered, up from 79 bid, 81 offered, the trader said.

As part of its reorganization plan, Tribune expects to get a $1.1 billion new term loan of which some of the proceeds will be used to make debt distributions, and distribute $1.9 billion of cash and common stock or warrants to thousands of creditors on or after the plan effective date. A $300 million line of credit is also anticipated to be obtained.

The plan proposed by the Chicago-based media company's debtors, official committee of unsecured creditors, Oaktree Capital Management LP, Angelo Gordon & Co. LP and JPMorgan Chase Bank was confirmed on July 23.

Sara Rosenberg contributed to this article

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