NII Holdings remains weak as investors wait for bankruptcy; Caesars bonds under pressure

By Stephanie N. Rotondo

Phoenix, Aug. 13 – NII Holdings Inc. remained a notable name in the distressed debt market on Wednesday, as investors continued to react to the company’s earnings announcement.

The release came out late Monday and in it the company warned that its liquidity was not sufficient to cover its debt obligations – $119 million comes due Friday – and that a bankruptcy filing was likely. On Tuesday, the bonds dropped as much as a dozen points and were weaker still come Wednesday.

Meanwhile, Caesars Entertainment Corp. – another company that put out earnings on Monday – was “getting hit,” a trader said, as investors grew concerned about the state of Atlantic City and singer Celine Dion canceled her Las Vegas shows.

On Tuesday, Caesars announced a refinancing of nearly $550 million of debt.

Still, the distressed space finished the session with a mostly firm tone, following the trend of the broader markets.

The coal space was seen benefiting from the positive tone. Walter Energy Inc.’s 8½% notes due 2021 ended a point better at 50, while the 9 7/8% notes due 2020 put on 2 points to end around 55¼, a trader said.

Arch Coal Inc.’s 7% notes due 2019 and 7¼% notes due 2021 were both a quarter-point higher, the trader added, seeing the notes at 70¼ and 65¾, respectively.

In Alpha Natural Resources Inc. paper, the 6¼% notes due 2021 rose half a point to 67½, as the 9% notes due 2019 gained a like amount to 69¼.

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