Exide Technologies debt drops on DIP chatter; Sears hurt by earnings; Fannie, Freddie improve

By Stephanie N. Rotondo

Phoenix, May 24 - The distressed bond market saw muted action on Friday, as some players were away form their desks, taking an early advantage of the long holiday weekend.

Still, those empty desks didn't stop a couple names from getting pressured.

Exide Technologies Inc.'s debt "got clobbered," a trader said. The bonds were down significantly on reports the battery maker was shopping for bankruptcy financing.

Meanwhile, Sears Holdings Corp.'s bonds took a dip following the release of a larger-than-expected quarterly loss.

In the world of preferred stock, a trader said that Fannie Mae and Freddie Mac paper was "all popping" again. The securities had risen in the previous session on the back of a decent home sales report from the Commerce Department.

Exide seeking DIP

A trader said that Exide Technologies was notable for the day, as the company's debt dropped nearly 10 points on the day.

The declines were attributed to reports that the company was looking for someone to finance a debtor-in-possession facility.

"If they are going to file, that ain't going to be good for the bonds," the trader said.

The trader pegged the 8 7/8% notes due 2018 in a 65 to 67 range. He also saw the 2.37% convertible notes due 2013 falling to the mid-teens from the mid- to high-30s.

The company's stock (Nasdaq: XIDE) meantime plummeted 33.25 cents, or 42.58%, to 44.98 cents.

Exide is a Milton, Ga.-based manufacturer and recycler of batteries.

Sears' earnings miss

Sear Holdings reported a wider-than-expected quarterly loss late Thursday, putting pressure on the retailer's bonds and equity come Friday trading.

A trader called the 6 5/8% notes due 2018 down a couple points at 98 bid, 98½ offered.

The stock (Nasdaq: SHLD) dropped $7.92, or 13.62%, to $50.25.

For the first quarter of 2013, the Hoffman Estates, Ill.-based company posted a net loss of $279 million, or $2.63 per share. That compared to a profit of $189 million, or $1.78 per share, the year before.

Domestic same-stores sales dipped 3.6%, while Canadian sales fell 2.6%.

Revenues declined to $8.5 billion, down $818 million from 2012.

Analysts polled by Thomson Reuters were expecting an average loss of 60 cents per share on revenues of $8.74 billion.

Sears attributed the weaker figures to a variety of factors, including a cooler spring and economic pressures, as well as the fact that there are fewer Sears and Kmart stores open than compared to how many were doing business in the first quarter of 2012.

The company continues to look for ways to raise cash and said in the earnings release that it was considering a sale of its Protection Agreement business.

Fannie, Freddie higher again

Fannie Mae and Freddie Mac preferreds continued to post gains following Thursday's home sales report fro the Commerce Department.

Freddie's 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) gained 65 cents, or 11.13%, to $6.49. Fannie's 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) improved by 56 cents, or 10.04%, to $6.14.

And, Fannie's 8.25% series T noncumulative preferreds (OTCBB: FNMAT) put on 60 cents, or 8.7%, to $7.50.

In the report released Thursday, the Commerce Department said new single-family home sales rose 2.3% during the month if April, bringing the total annual pace of sales to 454,000 units. The median sales price jumped 14.9% to $271,000.

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