Kodak bonds extend gains into Thursday's session; Clearwire paper rebounds; broad market mixed

By Stephanie N. Rotondo

Portland, Ore., Oct. 20 - The distressed debt market had a "lackluster day" Thursday, traders reported.

"It seemed quiet," said one trader. "I don't know if it was necessarily holiday related," referring to the Jewish holiday Simchat Torah, which began Thursday.

While market indicators did move up on the day, a trader opined that the market was "in a holding pattern until we hear something out of Europe or something from Greece."

Eastman Kodak Co. paper was also on the rise, extending gains that began earlier in the week on news it had licensed some of its patents.

Meanwhile, Clearwire Corp. debt was on the rebound after several sessions of pressure. The company's debt is the second-biggest loser of the month as investors worry about its future with Sprint Nextel Corp.

Kodak extends gains

A trader said Eastman Kodak's 7¼% notes due 2013 were "up a little bit," trading around 43.

"I see a lot of markets, but it doesn't trade much," he said.

Another trader also called the paper "better," quoting the notes at 42 bid, 43 offered.

The Rochester, N.Y.-based company's bonds have been on the rise since Monday on news that company had licensed its laser-projection patents to Imax Corp. The licensing will provide Kodak with cash upfront, as well as milestone payments and royalty revenues over the next 10 years, helping the struggling 131-year-old company to narrow a cash shortfall and increase royalty revenues.

Also, Kodak recently filed a breach of contract lawsuit against Collins Ink Corp., which had been the sole provider of ink for some of Kodak's printers. Collins reportedly wants out of its 10-year agreement, citing concerns about Kodak's financial viability.

Clearwire on the rebound

Clearwire's debt has been under pressure recently as investors worry about what could happen to the already struggling company if Sprint Nextel makes good on its plans to stop using Clearwire's network by the end of 2012.

However, the bonds rebounded some on Thursday, according to traders.

One trader said the 12% notes due 2017 moved up to 45 bid, 47 offered, compared with 42 bid, 45 offered previously.

"So maybe they're off the deck a little bit," he said.

Another trader said the 12% notes due 2015 were "a little better" at 761/2, compared with 75½ bid, 76 offered on Wednesday.

On Oct. 7, Sprint told its investors that it intends to stop selling products compatible with Clearwire's network as it moves to its own LTE network. With Sprint potentially dropping its support, the Kirkland, Wash.-based company could struggle to find other financing options in the current market environment.

Broad market mixed

Among other distressed issues, Clear Channel Communications Inc.'s 11% notes due 2017 fell "about a point" to 58½ bid, 59 offered, according to a trader.

There was no fresh news out, however, to act as catalyst.

Caesars Entertainment Corp.'s usually active 10% notes due 2018 were "virtually unchanged" at 69½ bid, 70½ offered.

A trader noted that for the second day in a row, the notes "weren't in the top 10" most actively traded issues.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.