NII Holdings, J.C. Penney debt continue climb; RadioShack, Caesars bonds still under pressure

By Stephanie N. Rotondo

Phoenix, March 5 - The markets pulled back a little on Wednesday, but for many distressed credits, the only way was up.

NII Holdings Inc. continued to be active and remained firm for the second consecutive session. The bonds had been on the decline after the company reported earnings on Friday and said that liquidity was not enough to satisfy its obligations come 2015.

J.C. Penney Co. Inc. was also climbing higher yet again. The retailer's debt has been gaining strength ever since it released its earnings last week.

Also gaining momentum were Production Resource Group Inc.'s 8 7/8% notes due 2019. A trader said the issue "continued to inch up," rising nearly 2 points to end around 78.

The trader noted that at least $16 million of the bonds changed hands, "tons of trades for them."

Forest Oil Corp.'s 7¼% notes due 2019 also saw "a little bounce" after steadily declining since putting out numbers last week. The notes put on about half a point to close around 841/4.

The debt was firmer even as Moody's Investors Service dropped its credit rating to Caa1 from B3.

Arch Coal Inc. was another name that was better on the day, as a trader pegged the 7¼% notes due 2021 around 811/4, up almost half a point.

NIHD, J.C. Penney climbing higher

NII Holdings' debt continued to firm up for the second straight day, according to traders.

One trader saw the 7 5/8% notes due 2021 at 361/2, up 1 point on "loads of trades." The 10% notes due 2016 gained a deuce to 461/2.

Among other recently topical names that have been on the rise, J.C. Penney's 7.4% notes due 2037 put on a point to end around 76 3/8 and the 7.95% notes due 2017 rose 2 points to 901/4.

Another market source pegged the 5.65% notes due 2020 at 82½ bid, up almost 3 points.

Before Tuesday, NII Holdings' bonds had been taking hits as investors reacted to a liquidity warning in the company's earnings release. For its part, J.C. Penney reported better than expected earnings for the fourth quarter, which has resulted in a steady upward climb for that name.

Radio, Caesars remain weak

While there was definitely a firm tone in the distressed space, not all credits benefited.

RadioShack Corp. remained under pressure, just one day after the company reported a wider loss and the closing of 1,100 stores.

A trader called the 6¾% notes due 2019 off almost 2 points around 541/2.

On the heels of the dismal earnings, Moody's cut RadioShack's credit rating to Caa2 from Caa1 on Wednesday.

Caesars Entertainment Corp. was also falling yet again. Earlier in the week, the company announced it was selling four of its properties to an affiliate at the discounted price of $1.8 billion - the properties are valued at $2.2 billion. The company also put out preliminary quarterly results that failed to excite investors.

A trader saw the 10% notes due 2018 dropping over half a point to 451/2, while the 9% notes due 2020 declined 2½ points to 923/4. The 8½% notes due 2020 were down almost 3 points to 911/4.

Another source placed the 10% notes at 45½ bid, down 1½ points on the day.

On Wednesday, Standard & Poor's said it had placed the Las Vegas-based casino operator on CreditWatch with negative implications.

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