PDVSA paper trades actively, mixed after slew of headlines; Nokia, Supervalu gain with market

By Stephanie N. Rotondo

Phoenix, Aug. 6 - The distressed debt market was "pretty firm" on Monday, according to a trader.

However, he noted that total volume in the high-yield arena was just under $1 billion.

"There's not a lot of sellers of anything," lamented another trader. He also noted that investors were otherwise focused on new issues and earnings.

Petroleos de Venezuela SA paper was topping the day's most active list, as about $130 million of the Venezuelan-based state-owned oil company's two series of bonds traded. The company was making headlines all over the place on Monday, including news that it was taking over a failed Cuban offshore drilling rig.

Meanwhile, Nokia Corp. and Supervalu Inc. were inching higher, though on no fresh news.

PDVSA ends mixed

A trader said PDVSA was topping the day's list of most actively traded issues, with about $130 million of bonds trading.

However, the bonds were mixed on the day, the trader said.

The 9% notes due 2021 dropped nearly a point to 81, with $77 million of debt changing hands. The 8½% notes due 2017 meantime rose nearly 2 points to 873/4, on $54 million traded.

The state-run oil company was making a variety of headlines Monday. First, the company said it was taking over a failed offshore rig from Cuba. Second, Petroleo Brasileiro, or Petrobras as it's better known, said that PDVSA is still interested in forming a joint-venture with the Brazillian state-run energy business on a struggling refinery in northeast Brail.

If PDVSA aims to stay involved in the project, it will need to secure loan guarantees for its 40% stake in the $15 billion Abreu e Lima refinery.

On Friday, it was reported that Argentina and Venezuela made steps to create a strategic alliance between PDVSA and Argentina's YPF.

Among other oil companies, ATP Oil & Gas Corp.'s 11 7/8% notes due 2015 were "not very active," a trader said, pegging the paper at 37.

He remarked that he had expected more activity after learning that the company had reportedly hired Houlihan Lokey as a restructuring advisor.

Nokia, Supervalu gain traction

Nokia and Supervalu were benefiting from the stronger trading day.

A trader said Nokia's 5 5/8% notes due 2039 were up a touch at 78, though on no news.

Similarly, there was no news out on Supervalu, but those bonds were also on the rise.

A market source pegged the 8% notes due 2016 at 89¾ bid, up over a point on the day.

Elsewhere, a trader said that Eastman Kodak Co.'s 7¼% notes due 2013 moved up to trade around 27.

And, Ambac Financial Group Inc. bonds were quoted at 29 bid, 30 offered.

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