Sears inches higher as rumors circulate; ATP steady; ResCap bonds rise; Lee loan up on numbers

By Stephanie N. Rotondo

Portland, Ore., Jan. 17 - It was a subdued day for distressed debt, as the market ended "flattish," according to a trader.

Traders attributed the lackluster day to it being the first day back from a holiday weekend.

"It's the equivalent of a Monday," a trader said. "And there was not a lot of notable headlines to drive the market one way or another."

Sears Holdings Corp. remained an actively traded credit once again. Traders deemed the debt unchanged to slightly better and the stock was rising on speculation the company was planning to go private.

Meanwhile, ATP Oil & Gas Corp. was also busy, but unchanged. There was no news out on the Houston-based oil exploration company, but oil prices were moving up.

There was also no news out on Residential Capital LLC, but a trader said those bonds were inching higher regardless.

Sears busy, rumors swirl

A trader said Sears' 6 5/8% notes due 2018 were better, trading around 801/2.

Another trader deemed the issue unchanged around the 80 mark.

On Tuesday, rumors were circulating that the company was considering a plan to take the Hoffman Estates, Ill.-based retailer private.

In regulatory filings posted last week, Sears' chairman Eddie Lampert - also the owner of ESL investments - has been buying up shares to add to his nearly 59% stake.

Last week, CIT Group Inc. said it had halted supplier loans and payment guarantees for Sears' vendors.

ATP trades actively

ATP Oil & Gas' 11 5/8% notes due 2015 were actively traded during Tuesday's session, but holding steady, according to traders.

Traders placed the notes around the 67 level.

There was no fresh news out on the oil production company. However, oil prices rose $2.01, or 2%, to $100.71 per barrel. The gain in oil came as data from China indicated it might stave off a significant downturn.

ResCap gains ground

Residential Capital's 9 5/8% notes due 2015 were on the move up, a trader said.

He quoted the notes at 81 bid, 82 offered.

There was no fresh news out on the mortgage-lending unit of Ally Financial Inc. The company had been in the news recently, however, as Ally and ResCap investors search for ways to help the money-losing subsidiary. Though Ally has previously said it would not force the company into bankruptcy, market players have noted that the option is not off the table.

Ally is reportedly in talks with the Treasury Department as well as it searches for solutions.

Lee loan boosted

Lee Enterprises Inc.'s term loan was stronger on Tuesday with the company's release of first fiscal quarter earnings and announcement that it is targeting a Jan. 30 Chapter 11 emergence date, according to a trader.

The term loan was quoted at 70½ bid, 72½ offered, up from 70 bid, 72 offered on Friday, the trader said.

For the first fiscal quarter ended Dec. 25, the company reported net income of $14.6 million, or $0.32 per diluted share, compared to net income of $18.9 million, or $0.42 per diluted share, last year.

Operating revenue for the quarter totaled $199.6 million, a decline of 3.9% from $207.7 million in the previous year's first quarter.

Also, debt was reduced $10.6 million in the quarter and free cash flow totaled $29.2 million.

Lee is a Davenport, Iowa-based print and digital provider of local news, information and advertising.

Greek bank preferreds gain

National Bank of Greece SA's 9% series A noncumulative preference shares (NYSE: NBGPA) moved up 39 cents, or 9.49%, to $4.50 after the Athens, Greece-based lender said it had wrapped up a repurchase of covered and hybrid securities.

The bank bought back its 2016 covered bond issue, as well as five hybrid tier I bonds, all in an effort to improve its capital base.

Sara Rosenberg contributed to this article

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