Sprint steady on iPCS purchase; General Growth bonds grow; CIT bonds better; Hayes loan closes

By Stephanie N. Rotondo

Portland, Ore., Dec. 4 - Friday's distressed debt market saw "flurries of activity" early in the session, a trader said, but quieted down come afternoon.

"When the market opened, it wasn't really sure what it wanted to do," the trader explained. "It wanted" to move higher with the equity market, but as that arena began to drop toward the end of the day, "it kind of stalled."

As such, the market ended relatively unchanged across the board.

Sprint Nextel Corp.'s bonds held tight as the wireless telecommunications company completed its merger with iPCS Inc. The company paid $831 million for the asset - which include the assumption of $405 million in debt.

Meanwhile, General Growth Properties Inc.'s debt headed higher during trading. News out Friday indicated that buyers were circling the bankrupt mall operator, though the company has said no firm offers have been received.

CIT Group Inc.'s Canadian bondholders are reportedly claiming that the company has yet to finalize an agreement with them ahead of a confirmation hearing next week. But the bonds didn't seem fussed by that and headed for higher ground anyway.

In the automotive arena, Hayes Lemmerz International Inc. closed the books on its planned $150 million term loan. The debt is expected to allocate next week.

Sprint steady on iPCS purchase

Sprint Nextel bonds finished the week unchanged, according to sources, as the company completed its $831 million acquisition of iPCS Inc.

A trader said he saw "mostly bids" for the Overland Park, Kan.-based company's paper. He saw the 6% notes due 2016 at 87.25 bid, 88 offered, which he deemed "kind of unchanged," while the 7 3/8% notes due 2015 - the credit's most active issue, he said - were also steady at 93.25 bid, 93.75 offered.

The trader also saw the 8¾% notes due 2032 at 86 bid, 86.75 offered.

At another desk, the 6% notes were pegged at 85 bid, 86 offered and the 8¾% notes at 86 bid, 87 offered.

Sprint acquired iPCS after completing a tender offer for the company's stock at $24 per share. The offer was completed Nov. 25.

However, the deal also added another $405 million of net debt to Sprint's balance sheet.

According to a press release announcing the merger, pending litigation between Sprint and iPCS will now be resolved.

General Growth bonds grow

General Growth Property's debt moved higher with its equity counterpart Friday, as news reports speculated that several buyers were looking to buy pieces of the pie.

A trader said the "stock was up nicely," and placed the bonds and convertible debt generically at 95 bid, 96 offered. He called that up "1½ points or so."

But another market source quoted the 8% notes that were to have matured in April and the 5 3/8% notes due 2013 around par, which was up about 3 points.

Simon Property has reportedly expressed interest in picking up some of General Growth's assets, though the company has denied that it was actively looking to sell its properties off. Some market players have speculated that Westfield Group might also want in.

Earlier in the week, the Chicago-based mall owner announced it had reached a restructuring agreement with lenders holding about $9.7 billion in mortgages. The company is still looking to reach agreements with lenders on the remaining portion of its debt.

Among other real estate-related companies, Nakheel Development's 2011 maturities finished the session at 43 bid, 45 offered, about unchanged. The 3.172% coming due Dec. 14 closed lower at 58 bid, 60 offered.

"The [2009 issues] softened up, down 2 or 2 points, while the [2001 notes] remained the same," a trader said, as creditors held conference call to discuss their response to a government effort to restructure its debt.

CIT bonds somewhat better

Some of CIT Group's notes moved higher in trading, following reports that the New York-based lender has not yet finalized an accord with its Canadian noteholders.

A trader called "intermediate issues" - such as the 7 5/8% notes due 2012 - "up a little bit" at 73 bid, 75 offered. "Less popular ones were probably" 72 bid, 73 offered, he said.

On Oct. 31, a group of Canadian noteholders agreed to support CIT's proposed restructuring plan, which results in a Nov. 1 bankruptcy filing. However, those noteholders are now saying that the agreement has yet to be finalized and, as such, filed a "limited objection" to the company's plan.

The agreement would result in particular treatment for the creditors regarding certain collateral. There have not been any details released on this matter thus far.

Still, lawyers representing the group said they were hopeful a deal would be secured, according to a Bloomberg report.

"The noteholders believe that with further good faith work to complete the documentation by the company, the noteholders will not have an objection to the documentation," the article quoted the lawyers as saying.

A confirmation hearing is scheduled for Dec. 8.

Hayes Lemmerz loan closed

Hayes Lemmerz International Inc. shut the books on its $150 million term loan on Friday and the plan is to close and allocate the deal during the week of Dec. 7, a market source told Prospect News.

The term loan is currently being talked at Libor plus 800 bps with a 2% Libor floor and an original issue discount in the area of 96 to 97.

Deutsche Bank is the lead bank on the deal that will be used for exit financing.

Under the Northville, Mich.-based wheelmaker's plan of reorganization, which was confirmed by the court earlier this month, total consolidated pre-petition funded debt of roughly $720 million is expected to be reduced to about $240 million upon emergence.

Elsewhere in the autosphere, a trader saw American Axle & Manufacturing Inc.'s bonds up 3 to 5 points, "a nice move for them." He saw the 5¼% notes due 2014 trades up to 84, a 5-point gain, while the 7 7/8% notes due 2017 ended at 79.5 bid, 80 offered, up 3.5 points.

There was no news that might explain the rise, but several traders suggested relatively positive government employment numbers might brighten the investor outlook for automotive names.

Sara Rosenberg and Paul Deckelman contributed to this article.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.