NewPage still weak on CFO departure; Dynegy remains soft; Capmark debt moves up on plan filing

By Stephanie N. Rotondo

Portland, Ore., April 18 - Holidays bookending the week resulted in a quiet day in the distressed debt universe on Monday.

"We're not even at $1 billion," a trader said.

News that Standard & Poor's had placed the United States' debt on negative outlook might have also played a role in dragging that market down. The Dow Jones Industrial Average, for example, dropped about 140 points on the day, as market players tried to discern what it all meant.

NewPage Corp.'s subordinated debt remained weak as investors reacted to news out Friday regarding another executive departure.

Dynegy Inc. was also on the softer side. Last week, the energy company said it had hired advisers to help put together a restructuring plan.

Elsewhere, bankrupt financial services firm Capmark Financial Group Inc. saw its bonds firming Monday. The gains came in the wake of the company's Friday filing of its reorganization plan.

And, General Motors Corp.'s debt dipped in line with its losing equity. Equity distributions stemming from its bankruptcy case are expected to begin this week.

NewPage weaker on CFO exit

Concerned investors continued to put pressure on NewPage's 10% notes due 2012, in the wake of Friday's news that its chief financial officer, David Prystash, was resigning.

One trader called the notes down a point at 591/2, while another called the paper unchanged around 61.

Prystash reportedly chose to leave the Miamisburg, Ohio-based coated papermaker of his own accord. Curtis Short, controller and chief accounting officer, has been named the interim CFO, effective May 11.

Still, the departure marks the fourth executive resignation since last summer.

Dynegy debt declines

A trader said Dynegy's debt dipped in Monday trading, seeing the 7¾% notes due 2019 at 761/2.

Another source deemed the notes over a point lower at 76½ bid.

On Wednesday, the Houston-based power producer announced it had hired Lazard Ltd. as financial advisers and White & Case LLP as legal advisers for a potential restructuring plan.

The hiring came after two failed takeover attempts - one from Blackstone Group LP late last year and one from Carl Icahn in early 2011. Back in March, Dynegy warned a Chapter 11 filing might be in the cards if it could not get its balance sheet stabilized.

Capmark gains, plan filed

Capmark Financial Group's debt gained ground as the company filed its plan of reorganization.

The plan was filed on Friday.

A trader said the bonds - the 3¾% notes due 2010, the 7 7/8% notes due 2012 and the 8.30% notes due 2017 - closed a couple points higher around 53.

Under the terms of the plan, unsecured creditors will receive a pro rata share of a $900 million cash distribution, $1.25 billion of new secured debt and common stock.

Capmark is based in Horsham, Pa.

GM down with equity

General Motors' bonds saw "a little bit of action," a trader said.

The trader said the debt was weaker "what with the stock moving lower."

He saw the benchmark 8 3/8% notes due 2033 at 27 bid, 27½ offered.

Another trader called the notes down over a point at 27 bid, 28 offered.

The stock (NYSE: GM) declined 27 cents, or 0.89%, to $29.97.

Last week, Motors Liquidation Co. - the company formed in June 2009 to deal with the company's bankruptcy case - said it would be distributing equity to creditors by April 21.

GM is a Detroit-based automaker.

Broad market loses ground

Elsewhere in junk bond land, Clear Channel Communications Inc.'s 11% notes due 2016 closed a point lighter at 931/2, according to a trader.

The trader also saw Caesars Entertainment Corp.'s 10% notes due 2018 falling 1½ points to finish around 90.

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