Market muted, firm; NII debt quiets down; retailers, coal sector start week with positive tone

By Stephanie N. Rotondo

Phoenix, June 9 – Distressed debt traders said Monday was a slow day in terms of trading, but the market still managed to end with a positive tone.

“It was brutal,” one trader said of liquidity. “It was definitely a quiet day. Not a lot of newsworthy items.”

As the market firmed up, so did certain sectors such as retail and coal. However, NII Holdings Inc. debt was unchanged to weaker, depending on whom you asked.

One trader said the name “held its gains from last week,” seeing the 10% notes due 2016 around 32 and the 7 7/8% notes due 2019 around 85.

The trader noted that the name was “not nearly as busy as it was last week.”

At another desk, a trader said the bonds were actually lower, pegging the 10% notes around 32 – off a point, he said – and the 7 5/8% notes due 2021 at 28¾, down almost a point.

There was no fresh news out on the Reston, Va.-based provider of Nextel mobile phone services in Latin America and Mexico.

Retailers end firm

The retail sector was mostly higher on Monday.

A trader saw Claire’s Stores Inc.’s 8 7/8% notes due 2019 putting on almost half a point to close around 88 1/8. The paper was firm despite Standard & Poor’s lowering its outlook on the company to negative.

The trader also saw Toys “R” Us Inc.’s 10 3/8% notes due 2017 holding steady around 82.

Another market source placed Toys’ 7 3/8% notes due 2018 at 73¾ bid, up a deuce.

Yet another source said Gymboree Corp.’s 9 1/8% notes due 2018 “look like they have been in a little better.”

He placed the issue in a 67 to 68 context.

The retailer is scheduled to release earnings later this week.

Not all retailers were better, however.

A trader said J.C. Penney Co. Inc.’s 6 3/8% notes due 2036 came in slightly to end around 80 7/8. In the emerging market space, the trader said Chilean grocery store operator SMU SA’s 7¾% notes due 2020 slipped a quarter-point to 74½.

Coal gains steam

The coal space was also mostly firmer on the day.

One trader said Arch Coal Inc.’s 9 7/8% notes due 2019 rose a quarter-point to 87, though its 7¼% notes due 2020 fell half a point to 74.

The trader also saw Alpha Natural Resources Inc.’s 6% notes due 2019 rising a point to 74¼.

A second trader said Walter Energy Inc.’s debt was better, the 11% PIK notes due 2020 “just north of 80” and the 9 7/8% notes due 2020 “around 60.”

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