Distressed market ends with positive tone; NII Holdings recoups some losses; Getty pressured

By Stephanie N. Rotondo

Phoenix, Aug. 15 – There was some upside in the distressed debt arena on Friday, even in NII Holdings Inc., a trader reported.

The company’s bonds have been getting slammed since reporting earnings – and warning of a likely bankruptcy filing – on Monday. But on Friday, the name was rebounding a bit.

The 7 7/8% notes due 2019 ended up a deuce at 66¾, the trader said. The 11 3/8% notes due the same year put on almost 2 points, closing around 67½.

The 10% notes due 2016 were meantime up about 1½ points at 19 1/8, while the 7 5/8% notes due 2021 improved fractionally to 60½.

The trader said the bonds were trading flat, or without accrued interest.

Still, despite the day’s rally, the bonds were down as much as 10 points from where they started the week.

There is a $119 million coupon on the 10% notes that came due Friday, but it is not likely the company will pay it. In fact, earlier in the week Aurelius Capital Management was already claiming a default ahead of the due date.

The Reston, Va.-based provider of Nextel mobile services in Latin America and Mexico has struggled to update its system and has experienced a high level of subscriber churn. As such, its revenues – and therefore its bottom line – have dwindled drastically.

NII Holdings said in its 10-Q filed with the Securities and Exchange Commission on Monday that its future was not bright and that a trip to bankruptcy court seemed in the cards. However, the company also noted that it was in talks with creditors and parties interested in buying some or all of its assets.

While NII Holdings was rebounding, investors continued to pressure Getty Images Inc.’s 7% notes due 2020.

The paper began falling on Thursday after the Seattle-based photography company reported earnings that were said to be poor. One trader said the issue fell 3 points in the previous session, while another deemed the debt off by over a point in Friday trading.

The second trader pegged the bonds at 82½.

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