Verso Paper remains weak, NewPage merger concerns grow; Alpha Natural bonds gaining steam

By Stephanie N. Rotondo

Phoenix, June 19 – Verso Paper Corp. remained notable in Thursday’s distressed debt arena, a trader said, as investors’ concerns regarding a proposed merger with NewPage Corp. continued to escalate.

The trader saw the 8¾% notes due 2019 falling 3 points to 41¾ on “pretty heavy volume, almost $20 million.”

Rumor has it that a merger between Memphis-based Verso and Miamisburg, Ohio-based NewPage is struggling to get completed. The two papermakers announced the merger on Jan. 16. At that time, the deal was valued at about $1.4 billion.

On the positive side, Verso announced Tuesday that it was in early compliance with the New York Stock Exchange’s listing requirements, meaning that its equity was no longer in danger of being delisted.

Alpha Natural Resources Inc.’s debt “continued higher,” a trader said.

The Bristol, Va.-based coal producer presented at the Sterne Agee 2014 Boston Summit on Tuesday. In its presentation, the company said it was well-positioned to deal with a lingering soft market and that it was continuing to evaluate costs reductions.

The company also noted that demand growth is expected to be “more balanced” in 2014.

And, Alpha Natural affirmed its 2014 guidance on Tuesday.

Elsewhere in the coal space, Arch Coal Inc.’s bonds were also on the firm side.

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