Springleaf's recently beaten bonds rebound; Sprint, Clearwire recoup some losses; Caesars firm

By Stephanie N. Rotondo

Portland, Ore., Oct. 11 - The distressed debt market "opened kind of firm from Friday," a trader said Tuesday.

"Some names were catching a bid," he said.

Another trader remarked that the market "keeps creeping up."

Springleaf Finance Corp.'s bonds - which had been getting ground up recently - were rebounding in active trading.

"You couldn't find a bid for these things [previously]," a trader said. "The bonds have been under pressure for the last few weeks."

Also getting a boost, despite its ratings being put on review, was Sprint Nextel Corp. Its network partner Clearwire Corp. was also on the rise.

Among market mainstays, Caesars Entertainment Corp. was about unchanged from last week's levels.

Springleaf moves back up

Springleaf Finance's debt was moving up on "good volume for them," according to a trader.

The trader placed the 6.90% notes due 2017 at 711/4, up from 70 bid, 70½ offered. The 4 7/8% notes due 2012 inched up half a point to 951/2.

Another trader called the 6.90% notes "up another point, point-and-a-half," also around the 71½ mark.

"They've come back from the mid-60s last week," he said.

Springleaf was formerly known as American General Finance and used to be a division of American International Group Inc. The unit was spun off and then bought by Fortress Investment Group.

But the company is laboring under a mountain of debt, including $756 million that matures this year and $2.04 billion that comes due in 2012. Springleaf had previously announced plans to form a real estate investment trust, which would then buy certain assets, allowing the parent company to pay its debts.

Due to recent market conditions, however, those plans have been derailed.

Sprint, Clearwire rebound

Last week, Overland Park, Kan.-based Sprint Nextel held an investor conference in which it said it was planning to discontinue selling devices compatible with its Clearwire partner's WiMax network by the end of 2012.

The news sent investors running, pushing down both Sprint and Clearwire bonds.

But a positive tone in Tuesday's market helped both credits regain a bit of ground - even as Standard & Poor's placed Sprint on watch negative.

A trader said the 6 7/8% notes due 2028 were the busiest in the Sprint complex. He said the issue opened weaker but "seemed to get better towards the end of the day."

The bonds closed at 691/4, up from opening levels of 68 bid, 68½ offered.

Other issues were also gyrating but eventually ending higher. The 8 3/8% notes due 2017 closed at 861/2, while the 6% notes due 2016 ended around 811/4, up from early levels around 79.

At another shop, a trader said Clearwire's 12% first-priority senior secured notes due 2015 had traded up to 73 bid, 74 offered.

"They were closer to 70," he said.

The 12% second-priority senior secured notes due 2017 were also better, trading "closer to 40," versus previous levels in the 30s.

Caesars hangs in

A trader said Caesars Entertainment's 10% notes due 2018 "never really traded any higher" than Friday's close, pegging the notes around 66.

The 11¼% notes due 2016, however, were up half a point around 105, he said.

Another trader quoted the 10% notes at 66 bid, 66½ offered, up from 65.

Caesars is a Las Vegas-based casino operator.

Broad market firms

Among other distressed issues, a trader said OPTI Canada Inc.'s 7 7/8% and 8¼% subordinated notes due 2014 were "up a bit" at 631/2.

"They're getting closer to the Chinese takeout of that name," he said.

Lehman Brothers Holdings Inc.'s paper was also stronger at 23¾ bid, 24 offered as investors "have more confidence in that bankruptcy."

And, NewPage Corp.'s 11 3/8% first-line notes due 2014 inched up to 74 bid, 74½ offered, while the 10% second-lien notes due 2012 gained a point, finishing around 11.

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