Clearwire bonds firm, stock dives as Google unloads equity stake; Sprint rises despite lawsuit

By Stephanie N. Rotondo

Portland, Ore., Feb. 24 - A trader said the distressed debt market was "generally stronger" Friday and volume was "better than I thought."

Another trader agreed that "everything was better," but noted that it remained "a new issue game."

Clearwire Corp. paper inched up slightly, even as Google Inc. announced it had sold off its stake in the Bellevue, Wash.-based wireless telecommunications services provider. The news meantime pushed Clearwire's stock lower.

Also, Clearwire's majority stakeholder Sprint Nextel Corp. was on the firmer side, even as Comcast Corp. filed a patent infringement lawsuit against the Overland Park, Kan.-based telecommunications provider.

In the energy sector, Dynegy Holdings LLC's debt was "slightly better," according to a trader. There was no real news, aside from the company seeking an exclusivity extension.

Clearwire bonds firm

A trader said Clearwire bonds were "a little better" Friday, even as Google announced that it was selling its stake in the company, which put pressure on the common stock.

The trader quoted the 12% notes due 2017 at 95¼ bid, 96½ offered, up from 95 bid, 95¾ offered previously.

The stock (Nasdaq: CLWR) closed down 16 cents, or 6.84%, to $2.11.

Mountain View, Calif.-based internet search provider Google said Friday that it was selling its stake in Clearwire at a loss. Google invested $500 million in the struggling internet services provider in November 2008, but expects to receive just $47 million from the sale of its 29.4 million shares of stock.

Google will sell the stock at $1.60 per share, a nearly 25% discount to Friday's closing share price.

Sprint bonds stronger

Elsewhere in the telecom arena, Sprint Nextel paper was gaining despite news that Comcast was suing the company, alleging patent infringement.

A trader called the 6% notes due 2016 up half a point at 913/4, while the 6 7/8% notes due 2028 improved "almost 2 [points]" to 791/4.

The 8¾% notes due 2032 earned over 2 points, ending around 901/4, he said.

A second market source placed the 6% notes up 2½ points at 93¾ bid.

Comcast, the largest cable company in the U.S. filed the lawsuit in Delaware federal court Friday, alleging that Sprint infringed on four of its telecommunications patents. The plaintiff stated that it "has been irreparably harmed by that infringement and will suffer additional damages" unless the matter is dealt with, according to court documents.

The filing of the lawsuit followed another filing last week when Comcast cried patent infringement on four other telecommunications patents in a Philadelphia court. That suit was preceded by a lawsuit filed by Sprint against Comcast in December alleging patent infringement in regard to patents related to phone calls transmitted over digital lines.

Dynegy debt gains

Dynegy Holdings' debt was "slightly better," according to a trader.

He pegged the 8 3/8% notes due 2016 at 65¼ bid, 66¼ offered and the 7¾% notes due 2019 at 64¼ bid, 65¼ offered.

Another trader said the 8 3/8% notes were stronger, trading around 66.

There was no fresh news out on the Houston-based bankrupt subsidiary of Dynegy Inc, although the company did apply for a 120-day exclusivity extension.

The unit filed for bankruptcy on Nov. 7.

Broad market firms

In other distressed debt dealings, a trader said Lehman Brothers Holdings Inc.'s bonds were "creeping up a little."

He quoted the debt generally at 27½ bid, 28 offered, noting that "some of the better [quality] issues" traded at 273/4.

He also saw Dex One Corp.'s 12% notes due 2017 trading at 24½ bid, 25 offered, adding that the bonds were trading flat due to a missed coupon last month.

NewPage Corp.'s 11 3/8% first-lien notes due 2014 were deemed a point better, closing around 60.

Another trader said Caesars Entertainment Corp.'s 10% notes due 2018 were active but unchanged around 753/4.

The trader also said that Clear Channel Communications Inc.'s 11% notes due 2016 were up 1½ points to 771/2.

And, Exide Technologies Inc.'s 8 5/8% notes due 2018 were called unchanged at 763/4.

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