Pliant bonds start active, then die; Insight Health steady; Tembec notes weaker

By Stephanie N. Rotondo

Portland, Ore., May 16 - Traders reported a quiet day in the distressed bond market, attributed to a tornado warning that swept through New York late in the day.

"It's pitch black outside," a trader said just minutes after the market closed.

The trader said a lot of players high-tailed it out of the office a little early, as many live in the suburbs of the city.

"I might have to stay [in the office] until this blows over," said another source.

Still, of the names traders did see moving, Pliant Corp.'s bonds got active in early trading, just ahead of the company's earnings conference call. However, the activity soon diminished, according to a trader.

Meanwhile, Insight Health Services Corp. saw some activity in its bonds after Tuesday's "softening" in the medical services sector. Still, the notes remained fairly stable.

The fluctuations in the strength of the Canadian dollar might not be what is hurting Tembec Inc.'s bonds. The debt was seen weaker again this week, as the Canadian unit nears a 29-week high.

Pliant bonds move, then die

A trader said packaging company Pliant's 11 1/8% notes due 2009 traded in the 101.25 levels ahead of the company's conference call. The trader said activity died after what he called a "neutral" call, adding he was unsure if the call was what moved the notes.

The Schaumburg, Ill.-based company posted its first-quarter results ahead of the call, reporting an almost $12.5 million loss for the period ended March 31, compared with a net loss of more than $60 million for the same quarter the previous year.

Insight Health notes active

A market source said he saw Insight Health's floating-rate notes due 2011 at 90 bid, 92 offered but added that he had "not seen these in a little while" and was not sure if the debt had moved up or down.

The diagnostic imaging service provider saw activity in its notes Tuesday on the heels of MedQuest Inc.'s release of quarterly results. A trader had said the notes softened on that news.

The Lake Forest, Calif.-based company is preparing for the completion of a debt-for-equity swap on its 9 7/8% notes due 2011. The exchange period was extended earlier this month to Wednesday at 11:59 p.m. ET.

Elsewhere, MedQuest's 11 7/8% notes due 2012 "got a little bit better" toward the end of the day, the source said.

The source pegged the notes at 76 bid, 79 offered in morning trading, but later in the day, he saw the bonds trade as high as 80.

Another trader said he saw the bonds at 79.75 bid, 80.25 bid. At another desk, a trader saw the bonds at 77.5 bid, 79.5 offered, around where they ended Tuesday.

Tembec bonds down

Tembec's bonds got "beat up a little," according to a market source. He quoted the 7¾% notes due 2012 at 53.5 bid, 54.5 offered.

The forest products company's bonds have been slipping since the company posted first-quarter results last week. Some had attributed previous gains to a weakening Canadian currency, while others said the Canadian unit's strength was not a factor.

Calpine loan better

Calpine Corp.'s debtor-in-possession term loan headed higher on Wednesday following the appearance of "a bullish" article in the Wall Street Journal, according to a trader.

The term loan ended the day at par ½ bid, par ¾ offered, up from par 3/8 bid, par 5/8 offered, the trader said.

The article basically claimed that the San Jose, Calif.-based gas-fired power generation company could see certain advantages in its future on the environmental front.

The article also said that Calpine's debt reduction through its Chapter 11 restructuring and rumors of buyout interest could play favorably for the company.

A bond trader said the company's bonds were also helped by the story. The 8½% notes 2011 were up 2 points to 122.5 bid, 123.5 offered.

Broad market mixed

A trader said Movie Gallery Inc.'s bonds are getting slightly better, with its 11% notes due 2012 at 78 bid, 79 offered, while another source pegged the notes at 77 bid, 78 offered. However, the source said the notes last traded at 79.

"Somebody did some buying," he said.

At another desk, a trader saw the bonds up to 78 bid, 79 offered, up from previous levels of 76.75 bid, 77.75 offered.

Meanwhile, the trader said Fedders Corp.'s 9 7/8% notes due 2014 were stabilizing in the 41 levels. Another trader, however, saw the notes down 2 points at 40 bid, 42 offered.

The source also said he saw Hines Horticulture Inc.'s 10¼% notes due 2011 trade at 81.

"They are about half a point better than I thought they were," he said.

James River Coal Co.'s debt was also seen trading just over 94.

In distressed airline paper, a trader said Northwest Airlines Corp.'s bonds moved up 3 points, with a trader pegging the 10% notes due 2009 at 75 bid, 76 offered. Delta Air Lines Inc.'s stubs lost 0.25 point to 6.25 bid, 6.75 offered.

Sara Rosenberg and Paul Deckelman contributed to this article.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.