NewPage bonds take bumpy ride; Kodak drops as Apple seeks to sue; ATP paper improves modestly

By Stephanie N. Rotondo

Portland, Ore., Feb. 16 - The distressed debt market generally followed the trend of the broader markets Thursday, starting weak and ending a bit stronger, according to traders.

One trader said the "bond of the day" was NewPage Corp. The debt gyrated throughout the session, eventually ending about unchanged. There was no fresh news out on the bankrupt papermaker and one trader opined that it was continued reaction from news out earlier in the week about an amendment to the debtor-in-possession facility.

Meanwhile, Eastman Kodak Co.'s paper was losing ground. The bonds were slipping as Apple Inc. sought to file a patent infringement lawsuit against the bankrupt digital imaging company.

On the upside were ATP Oil & Gas Corp.'s bonds. The notes improved modestly in Thursday trading, following the company's announcement on Wednesday that it was seeking to expand its credit facility.

NewPage paper gyrates

NewPage's 11 3/8% first-lien notes due 2014 were "on a rollercoaster," according to a trader.

The paper got as los as 53, he said, but closed 57 bid, 58 offered.

Another trader saw the notes open around 60, trade down to 54 and then end around 57.

"Lots of volume," the second trader said. He noted that there was "nothing news-wise" that would have caused the gyrations, aside from news out on Tuesday regarding the company's plot to relax certain covenants on its DIP loans.

The bankrupt Miamisburg, Ohio-based papermaker said Tuesday that it was looking to reduce its minimum consolidated adjusted EBITDA requirements and to increase the notes payment reserve, among other things.

Kodak falls on Apple suit

Eastman Kodak paper was on the decline Thursday as investors reacted to news that Apple was seeking to sue the bankrupt company for patent infringement.

The 7¼% notes due 2013 were down "a couple points" around 28, one trader said. The second-lien issues, such as the 10 5/8% notes due 2019, were also a couple points weaker at 89 bid, 90 offered.

A second trader said the bonds were "a touch weaker," the 9¾% notes due 2018 trading in an 89-90 context.

On Wednesday, Apple asked the judge overseeing Kodak's bankruptcy case for the OK to sue for copyright infringement. Apple claims that Kodak used Apple technology in its printers, digital cameras and digital picture frames.

Back in 2010, Kodak had sued Apple and Research In Motion for patent infringement regarding its preview imaging copyrights. That suit has yet to be finalized.

Kodak is based in Rochester, N.Y.

ATP steady to better

ATP Oil & Gas' 11 7/8% notes due 2015 were trading actively, a trader said, but were "not much changed."

He placed the issue around 643/4, up about a quarter-point.

Another trader said the bonds were "up a little bit," at 633/4.

On Wednesday, the Houston-based oil exploration company said it was looking to increase its first-lien senior secured term loan facility given its preliminary favorable estimates of its oil reserves.

The company is looking to expand the facility by $140 million, which would bring the total to $348 million.

A&P loan frees, gains

Great Atlantic & Pacific Tea Co.'s $270 million term loan freed up for trading on Thursday, with levels quoted at 98 bid, 99 offered on the open and then moving up to 99¼ bid, par ¼ offered, according to a trader.

Pricing on the loan is Libor plus 900 bps with a 2% Libor floor, and it was sold at an original issue discount of 96. The debt is non-callable for two years, then at 102½ in year three.

During syndication, the term loan was downsized from $350 million, pricing was increased from Libor plus 700 bps with a 1.25% Libor floor and an original issue discount of 98, and call protection was sweetened from 102 in year one and 101 in year two.

The company's $645 million five-year exit facility also includes a $375 million ABL revolver that was reduced from $400 million.

J.P. Morgan Securities LLC and Credit Suisse Securities (USA) LLC are the lead banks on the deal that will be used by the Montvale, N.J.-based operator of supermarkets to repay a debtor-in-possession facility, pay Chapter 11 emergence costs and for general corporate purposes.

Broad market mixed

In the rest of the distressed space, Clear Channel Communications Inc.'s 10¾% notes due 2016 were active, but weaker around 76, according to a trader.

The 9% notes due 2021 meantime gained a point to end around 88, he said.

Sears Holdings Corp.'s 6 5/8% notes due 2018 were also "pretty active," and about half a point higher at 85.

Also, Sprint Nextel Corp.'s 6 7/8% notes due 2028 inched up a tad to 761/4.

Sara Rosenberg contributed to this article

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