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NII enters bankruptcy, bonds inch higher; Colt earnings disappoint; Gymboree slides again
By Stephanie N. Rotondo
Phoenix, Sept. 15 – The distressed debt market kicked off the new week with a not-unexpected bankruptcy filing and poor earnings.
The bankruptcy came from NII Holdings Inc. But the company had warned that the filing could be coming when it announced its latest quarterly results in early August.
In its earnings release in early August, the Reston, Va.-based provider of Nextel mobile services warned that it might seek Chapter 11 protections, due to dwindling subscriber growth and thus, lower revenues.
The lower revenues in turn resulted in an inability to update the company’s infrastructure.
One trader said that the market “initially tried to take the bonds down a little bit lower,” but by the end of business, they were trending higher.
The poor earnings meantime came from Colt Defense LLC. The gun manufacturer swung to a loss in the most recent quarter, due to dwindling sales.
Last month, the company secured an amendment to its term loan, eliminating and modifying certain covenants and providing for an extension to deliver certain financial information to investors. However, the company warned that it could still violate one or more of the covenants come the quarter ending Dec. 31, or possibly in 2015.
Also topical was Gymboree Corp. The company’s debt has been off since releasing weak numbers and, according to one market source, the company has hired legal advisors to look over restructuring options.
Elsewhere in the retail world, RadioShack Corp.’s 6¾% notes due 2019 were treading water, even on the heels of the resignation of the company’s chief financial officer on Friday.
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