Travelport climb continues; Edison Mission remains busy; MBIA gyrates on interest questions

By Paul Deckelman

New York, Jan. 9 - Travelport LLC's bonds continued to rise on Wednesday , with both its senior bonds and its subordinated debt - the latter trading deep in distressed-bond territory - seen having tacked several more points onto the travel services company's recent solid rise.

Going in the opposite direction, traders saw Edison Mission Energy's already battered bonds continuing to slip. The power generating company's debt was among the most actively traded junk bond issues on the day.

Investor uncertainty over whether mortgage insurer MBIA Inc. will be allowed to make a scheduled mid-month interest payment resulted in volatile trading in those bonds. New York State regulators have the final say-so on that question - but have not yet ruled on it.

There was not much follow-through on Wednesday in Sears Holdings Corp.'s bonds, which had firmed in Tuesday's trading on the news that the retailer's CEO will step down, to be replaced by its chairman and biggest shareholder.

Telecommunications company Clearwire Corp.'s bonds were seen better on the news that satellite TV broadcaster DISH Networks Corp. had made a bid for the Clearwire, looking to trump the latter's 50% owner, Sprint Corp., in the battle for Clearwire's valuable wireless spectrum frequencies.

Travelport journey continues

A trader said that Travelport's recent upside ride was continuing Wednesday, seeing the Atlanta-based travel services firm's 9 7/8% notes due 2014 get as good as 95 bid, which he called "up another 3 points" on the session from where those bonds had been on Tuesday.

"There's been a nice little pop in that name," a second trader said, noting that the '14s were "up a couple of points" in a 94 to 95 bid context, on volume of over $11 million.

He also saw its 11 7/8% subordinated notes due 2016 around 60 bid on Wednesday, on volume of about $5 million or $6 million.

"The last few days, it's been up a couple of points every day," he said, including Wednesday's 3 point gain.

The bonds started firming last week on news that the company had reached a deal with airline operator AMR Corp. regarding the ongoing legal battle between the two companies.

Travelport "was up a few more," yet another trader said, seeing the senior bonds at 94½ bid, 95½ offered. He meantime saw Fort Worth, Texas-based AMR's 6¼% convertible notes at 95 bid, up 2 to 3 points.

Edison Mission slips

A trader said that Edison Mission Energy's 7% notes due 2017 continued to trade in a 48 bid context, calling that "a little bit lower today - yesterday [Tuesday], they probably were around 481/2-49."

He estimated that the Santa Ana, Calif.-based power generating company's bonds were seen among the most actively traded names in Junkbondland on Wednesday, other than the various issues of steelmaker ArcelorMittal SA, which clearly dominated the volume-leaders' list

A market source saw over $16 million of the Edison Mission paper changing hands, although he saw it essentially unchanged at 48½ bid.

"It was really unchanged, on decent volume," another trader said. He saw the bonds trading in a 47 to 48 context during the session, remarking that "if it was at 47, it was down a point, but if it traded around 48, it was unchanged.

"It's a big company," he said in opining that the brisk volume was not atypical for issues of that size.

Edison Mission's 7½% notes coming due on June 15 lost nearly 2 points on the day, finishing at 47¼ bid, on volume of more than $8 million.

The company - the unregulated power generation business of Southern California utility giant Edison International - sought protection from its creditors late last month via a Chapter 11 filing with the U.S. Bankruptcy Court in Chicago., citing "a perfect storm" of heavy debts, weak power prices and high fuel costs. It has proposed transfer control of the company to the holders of $3.7 billion in unsecured bonds.

MBIA notes gyrate

A trader said that mortgage insurer MBIA's 14% surplus notes due 2033 "were somewhat volatile today." He said that the Armonk, N.Y.-based company's paper quoted "on either side of 10," although he saw the bonds going home around 15 bid, 18 offered, calling that about unchanged on the day.

"So they got quoted way down and wide."

He said the bonds were jumping around amid investor uncertainty about whether the company would be allowed to make a scheduled Jan. 15 interest payment on the bonds.

On Monday, the company said in an 8-K filing with the Securities and Exchange Commission that its wholly-owned subsidiary MBIA Insurance Corp., had issued a notice to the fiscal agent and the registered holder of the parent company's 14% notes, in accordance with the terms of the fiscal agency agreement governing the notes, indicating that that it has been advised by the New York State Department of Financial Services that the Department has not yet determined whether to approve MBIA's request to make the scheduled interest payment due on Jan. 15. Under New York State's insurance law, the Department must grant permission before the company can make the payment.

MBIA said in the filing that it is required to provide five business days' notice to the fiscal agent and the registered holder of the notes prior to the interest payment date "if it has not received approval by such date to pay the interest due on the interest payment date."

Sears slacks off

Elsewhere, a trader said that Sears Holding's bonds "weren't nearly as active" on Wednesday as they had been on Tuesday.

He saw the bonds trading at about 95 bid, "about in line with where they were [Tuesday], maybe a smidge better."

On Tuesday, the bonds had moved up following Monday's announcement that its current chief executive officer, Louis D'Ambrosio, will leave his post in February due to what are described as "family health matters." The company's chairman, Edward Lampert, will take over that role in addition to his current duties.

The Hoffman Estates, Ill.-based department store operator's bonds reacted positively to the news, as a trader saw its 6 5/8% notes due 2018 rising "almost" ½ points to end around 95 bid.

Clearwire up on DISH news

A trader said that Clearwire's bonds were "a little better on the heels of the DISH news - that the satellite television broadcaster had made a bid for Belllevue, Wash.-based Clearwire, apparently looking to top the offer that Clearwire's 50% owner, Sprint, was making for the remainder of the company.

He saw Clearwire's 14¾% notes around 139 bid while its 12% notes due 2015 moved up to "just north" of 108 bid, which he called a ½ point gain.

Another trader called the Clearwire bonds up ½ to 1 point on the news that DISH is offering to buy that other 50% of Clearwire for $3.30 per share, topping Sprint's current bid of $2.97 per share, although Overland Park, Kan.-based wireless operator Sprint is expected to match that and raise the ante.

The two companies are each hoping to gain access to Clearwire's valuable wireless spectrum holdings.

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