Energy Future bankruptcy filing may come this weekend; NII turns positive again; Caesars falls

By Stephanie N. Rotondo

Phoenix, April 25 - Distressed debt was again taking a backseat to the broader high-yield market, with a few exceptions.

Rumors are again swirling that Energy Future Holdings Corp. was planning to file for bankruptcy over the coming weekend. The company's board of directors reportedly met Thursday to discuss two proposed bankruptcy plans - one that included its largest creditor and one that did not.

NII Holdings Inc. meantime regained the ground lost in the previous session. There was no news to explain either the slip or the rise.

Away from those names, a trader said Caesars Entertainment Corp. debt was "fairly active again," seeing the 9% notes due 2020 falling over half a point to 86½ and the 8½% notes due 2020 dipping a touch to close around 851/2.

Walter Energy Inc.'s 9 7/8% notes due 2020 saw "limited trading," according to one trader, but the bonds were down "almost 3 points" around 63 1/8.

The coal producer is scheduled to release earnings on Thursday.

TXU filing imminent

A bankruptcy filing from Energy Future Holdings could finally come to fruition this weekend, as the company works to set a plan in place ahead of May 1.

If the company does not take some sort of action by that date, it will be considered in default due to missing a coupon payment on its 15% notes due 2021. A default would then accelerate payments on other outstanding debt.

One trader saw the 10½% notes due 2016 trading around 61/2, which he said was "probably down slightly." Another trader pegged the 10% senior notes due 2020 at 106 3/6 - unchanged to up a touch - and the 15% notes at 241/2.

He deemed the latter issue up about a point.

The Dallas-based energy producer's board reportedly had a meeting on Thursday in which two bankruptcy plans were discussed. The company wants a plan in place ahead of filing in order to avoid a free-for-all.

Having a plan could also help the company avoid triggering a tax liability that could reach as high as $7 billion.

Of the two plans being discussed, one includes Fidelity Investments and one does not. Fidelity is the company's largest creditor and has previously balked at proposals that would have given them 10 cents on the dollar for their debt holdings.

The plans currently on the table are said to provide a 40-cent-on-the-dollar recovery for the investor.

NII regains ground

After halting its recent run-up in the previous session, NII Holdings was back in the saddle Friday, erasing Thursday's losses.

A trader called the 7 5/8% notes due 2021 up a quarter-point to 303/4. The 8 7/9% notes due 2019 were up a like amount at 481/4.

Prior to Thursday trading, the company's debt had been on a steady climb upward. But there has not been any fresh news to act as a catalyst.

The Reston, Va.-based company provides Nextel mobile services in Mexico and Latin America.

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