Clear Channel bonds mixed on new issue; Sorenson slips on term loan launch; Kodak holds ground

By Stephanie N. Rotondo

Phoenix, Feb. 21 - Even with news out, the distressed debt arena remained subdued on Thursday.

"It was all new issues," one trader said. A new deal from Clear Channel Communications Inc. did spur some activity in that name, however.

"Equities continue to be the show," another trader said, noting that the markets gyrated throughout the day's session.

Aside from Clear Channel, Sorenson Communications Inc. said it was launching a $500 million term loan B on Friday. A trader said the proposed deal was "not surprising to the market," given that the company had pulled a similar deal back in December.

The company's bonds were not much changed on the news.

Meanwhile, Eastman Kodak Co. said it was looking to extend a deadline for commitments on a planned new debtor-in-possession facility. Like Sorenson, however, the company's bonds were not much changed on the news, though one trader opined that could change.

Clear Channel mixed

Clear Channel Communications said on Thursday that it was planning a $500 million offering of new notes due 2021.

The deal was later upsized to $575 million, with yield talk at 11% to 11¼%.

On that news, a trader said the 9½% notes due that same year fell to 91½ bid, 92 offered.

However, he saw shorter-dated issues rising. He pegged the 5½% notes due 2014 at 98½ and the 4.9% notes due 2015 around 92.

The San Antonio-based multimedia company intends to use proceeds from the offering to pay off its term loan A due in 2014 in full.

Meanwhile, Clear Channel's term loan B moved up to 86½ bid, 87½ offered from 86¼ bid, 87¼ offered.

With the news of the paydown, the term loan A was bid higher with levels quoted at 99½ bid, par offered, versus 99¼ bid, par offered previously, the trader added.

Sorenson restarts loan offer

Sorenson Communications' 10½% notes due 2015 were "maybe slightly lower," a trader said, seeing the issue offered at 84.

The slip came on the back of news that the Salt Lake City-based company - a provider of voice relay telecommunications services for the deaf - intended to launch a $500 million term loan B on Friday.

The trader said the proposal was "not surprising.

"They had been in the market before, but then it got pulled," he said.

On Dec. 17, Sorenson nixed plans for a $200 million seven-year term loan B, as well as a $400 million offering of first-lien senior secured notes. At that time, a source attributed the delay to an action pending by the Federal Communications Commission on CaptionCall, one of Sorenson's businesses.

Should the company follow through on its new plan, proceeds will be used to repay an existing term loan.

Kodak steady

Kodak's second-lien notes held steady, as the Rochester, N.Y.-based company extended an offer for said noteholders to get into its new DIP.

Sources saw the second-lien issues - such as the 9¾% notes due 2018 - holding at 77 bid, 78 offered.

"It's not really trading," a trader noted. "If they extend that deal for a couple of weeks, maybe we'll see a little more activity in it. Right now, it seems like guys are kind of locked up."

Under the offer, second-lien holders can exchange their debt for new money loans and junior loans.

The deadline was extended to Feb. 28 from Feb. 21.

Broad market mixed

Among other distressed issues, a trader said AMR Corp.'s "higher coupons" were trading strong, quoting them at 109 bid, 109½ offered.

He said the benchmark 6¼% convertible notes due 2014 were "stuck" around 107.

Ameren Energy Generating Co. was meantime weaker. The 7.95% notes due 2032 and the 6.3% notes due 2020 dipped to 55, while the 7% notes due 2018 closed around 47.

And, Overseas Shipholding Group Inc.'s 8 1/8% notes due 2018 were on the rise gain, finishing around 41.

Revel loan declines

Revel AC Inc.'s term loan B dropped during Thursday's market hours to 34½ bid, 36½ offered from 36 bid, 38 offered, according to a market source.

The company recently announced plans for a pre-packaged Chapter 11 filing that has been approved by a majority of its lenders. Prior to the late Tuesday news, the loan was quoted at 37 bid, 39 offered, and first thing Wednesday morning levels moved up to 41 bid, 43 offered, but they started falling from those highs shortly thereafter.

Under the bankruptcy plan, credit facility lenders will convert their claims on a pro rata basis into a new secured super-priority priming debtor-in-possession credit facility that will be repaid in full by an exit facility, and term loan lenders will receive their pro rata share of 100% of new common equity to be issued by the reorganized company.

Also, holders of the company's 12% second-lien notes will receive their pro rata share of $70 million of new notes.

Revel is an Atlantic City, N.J.-based gaming and entertainment company.

Sara Rosenberg contributed to this article

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