ATP bonds gain as liquidity improves again; Bon-Ton Stores gets a boost; Dynegy debt dips

By Stephanie N. Rotondo

Portland, Ore., March 26 - Distressed bonds were "definitely better" on Monday, according to a trader.

"For the most part, everything was higher," he added.

But another trader lamented that it "continues to be the new issue show and the stock show and all that." For example, investors were keenly focused on a "new monster deal" from LyondellBasell, a $3 billion sale of high-yield notes at low interest rates.

Still, distressed credits got a piece of the action as well.

ATP Oil & Gas Corp. was moving up, a trader said. The company announced during the session further additions to its liquidity profile.

Meanwhile, Bon-Ton Stores Inc. was rising, though there was no news to prompt the move.

Though most of the market was on the firmer side, Dynegy Holdings LLC was seen slipping. As with Bon-Ton, there was no fresh news out to explain the decline.

ATP better, liquidity improves

A trader said ATP Oil & Gas' 11 7/8% notes due 2015 were "up a couple" to around 76.

Another trader called the issue "basically unchanged" at 741/2.

On Monday, the Houston-based offshore oil and gas development company said it had closed a $100 million temporary overriding royalty interest transaction at its Clipper property. The funds will be used for the property's capital program and production is expected to commence in late 2012 or early 2013.

Earlier in the month, ATP reported that it had increased its first-lien credit facility by $155 million. The interest rate on the facility was also lowered.

All told, the company has improved its liquidity by $355 million during March alone.

Bon-Ton moving up

York, Pa.-based retailer Bon-Ton Stores saw its 10¼% notes due 2014 rising with the stronger marketplace.

A trader deemed the notes up a couple points at 861/4.

Another trader quoted the issue at 87 bid, 88 offered.

And, a third trader called the paper "up a few points" to around 87.

There was no news out on the company that would have accounted for the gains.

Dynegy bucks trend, falls

Dynegy Holdings paper was also on the move without any news to act as catalyst. But unlike most of the market, Dynegy was on the decline.

A trader saw the 8 3/8% notes due 2016 falling a point to 63. Another market source pegged the 7¾% notes due 2019 at 67¾ bid, down slightly on the day.

Dynegy Holdings is the bankrupt subsidiary of Dynegy Inc., a Houston-based power producer.

Broad market gains

Among other distressed issues, Travelport LLC's 9 7/8% notes due 2014 continued to lose ground, falling nearly a point to 641/2, according to a trader.

Another trader said Lehman Brothers Holdings Inc.'s bonds were higher again, closing around 30.

"People are speculating that [recent Washington Mutual Inc. distributions] have found its way [to Lehman]," he said.

Eastman Kodak Co.'s 7¼% notes due 2013 were also trading around 30, the trader reported.

And, AMR Corp.'s unsecured notes - such as the 6¼% notes due 2014 - were seen pushing up to 44½ bid, 45 offered on rumors British Airways was considering making a play for the bankrupt airline.

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