Getty Images debt lower on poor numbers; J.C. Penney up; NII Holdings retreat continues

By Paul Deckelman

New York, Aug. 14 – Getty Images, Inc.’s bonds and loan paper were seen trading lower on Thursday. Market sources attributed the company’s slippage to disappointing quarterly numbers.

Elsewhere, traders saw continued erosion of NII Holdings, Inc.’s bonds, extending a slide that began several days ago after the company warned that it may be forced to file for bankruptcy.

But on the upside, J.C. Penney Co. Inc.’s bonds and shares rose after the department store retailer released favorable numbers late Wednesday.

There was also a fair amount of activity in Caesars Entertainment Corp. paper.

In the emerging markets space, Venezuela’s sovereign bonds were seen better, along with the paper of its state oil monopoly, Petroleos de Venezuela SA.

But Argentina’s sovereign debt was lower as hopes for a quick deal with hedge fund creditors on its defaulted bonds seemed to fade.

Getty goes lower

A trader said that Getty Image’s 7% notes due 2020 were down after the Seattle-based provider of stock photographs to newspapers, magazines and the advertising industry reported earnings.

He saw the bonds go as low as 82 before going out at 84, “so they recovered a little bit from the lows, but they probably finished down 3 points on the day.”

While he heard that the privately held company’s numbers were out, he said that he had not seen those results.

“But clearly, there were some sellers in the market today on that one. They were lower, and they were active.”

In the bank debt market, Getty Images’ term loan B softened to 94½ bid, 95½ offered from 95½ bid, 96¼ offered as the company released to lenders its quarterly numbers, according to one trader.

A second trader, meanwhile, had the loan at 94¼ bid, 94¾ offered, down from 95¾ bid, 96¼ offered.

The earnings results “didn’t look great,” the trader added.

NII slide continues

Back among the bonds, a trader noted that “one of the names of the last few days” that has been getting kicked around has been NII Holdings, the Reston, Va.-based provider of wireless service to customers in Mexico and other Latin American markets.

“That continued to get hit a little bit” on Thursday, he said.

He saw its 7 7/8% notes due 2019 ending down around 3½ points on the day at 63 bid, 64 offered. Volume was more than $7 million.

He also saw the company’s 11 3/8% notes due 2019 quoted at similar levels around a 64-to-66 context.

At another desk, a market source saw the latter bonds down 1¼ points at 65¾ bid, on volume of more than $15 million.

“They are all trading flat,” or without their accrued interest, the first trader said.

He also saw all of the company’s other paper “in the teens.” Those were the 10% notes due 2016, the 8 7/8% notes due 2019 and the 7 5/8% notes due 2021.

“They’re all anywhere from 14 to 18,” he said.

For instance, he said the 10% notes were trading in a 17-to-17½ range, “pretty much where they were [Wednesday],” with $6 million or $7 million traded.

He saw the 7 5/8% notes in a 15-to-16 neighborhood, with $7 million or $8 million having changed hands. At 15½ to 16½, he said, “that’s pretty much where they were yesterday.”

The company noted in its earnings release Monday that its declining financial performance combined with the likelihood that it will not be able to meet its debt obligations make a bankruptcy filing foreseeable in the near future. In a 10-Q filed with the Securities and Exchange Commission, the company said that it has been speaking with interested parties in regards to acquiring some or all of its assets.

The company has also engaged in talks with bondholders.

As of June 30, NII Holdings was not in compliance with several of its indentures, including on Nextel Brazil’s local bank loans.

On Wednesday, Standard & Poor’s dropped its credit rating on the company to CC from CCC. That followed a downgrade from Moody’s Investors Service on Tuesday.

Penney pops on earnings

A market source said that J.C. Penney bonds firmed in response to good quarterly numbers put up by the Plano, Texas-based department store chain operator.

He saw Penney’s 5.65% notes due 2020 up as much as 5½ points on the day at 95¼. More than $11 million of the notes traded hands.

Caesars seen active

Elsewhere, Caesars Entertainment paper “always has decent volume,” a trader said, quoting the Las Vegas-based gaming giant’s 9% notes due 2020 turning over more than $15 million bonds, putting it high up on the Junkbondland Most Actives list.

He saw those bonds trading all day in an 80-to-81 context but said the last few trades of the day went off between 80 and 80¼, calling that down ½ to 1 point.

Quicksilver gets quashed

A trader said that Quicksilver Resources, Inc. – under pressure since the Denver-based oil and gas exploration and production company reported below-expected results last week – remained in the crosshairs on Thursday, continuing to lose ground

He saw the 7 1/8% notes due 2016 trading right around 60 to 61 at the end of the day after having begun the day at 63.

He said that left the bonds down about 1½ points on the session.

Its 11% notes due 2021 were moving around 86½ to 87½, with “the last decent-sized trade at 86¾,” which he called pretty much unchanged from Wednesday’s level.

Last week, the company reported a second-quarter loss of 7 cents per share, worse than the 5 to 6 cents per share that Wall Street had been expecting. Its revenue fell by 9.3% from the year-ago quarter to $107 million, down from analysts’ estimates around $109 million.

Venezuela, PDVSA, up ...

In emerging markets debt, Venezuela saw its notes tick up between 15 cents and 50 cents on Thursday morning, while its state oil monopoly Petroleos de Venezuela’s notes due in 2026 traded up at 59.35 on good two-way flows, a trader said.

PDVSA’s bonds due 2024, meanwhile, moved to 62½ from 62.1, he said.

... but Argentina down

Elsewhere in Latin America, Argentina continued to take a beating in the market as investors began to lose hope that banks in the United States might assist in reaching a solution with bond holdouts.

The sovereign’s Bonar 2024s dropped to 86¼ from 89, and the Boden 2015s moved to 95 from 96 during the previous session, a trader said.

But flows were generally better, and buyers emerged for Argentina paper, he said.

On the news front, Buenos Aires on Thursday lashed out at the hedge funds suing the country over their debt holdings, denouncing them as “an international mafia.” Talks aimed at bringing a swift end to its latest default collapsed.

Investors had hoped that a group of international banks might buy the debt held by holdout creditors, facilitating an end to the crisis, but that possibility appeared now to be remote.

Sara Rosenberg and Christine Van Dusen contributed to this review

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