Distressed debt takes backseat to new issues, election; Supervalu, Clear Channel busy, better

By Stephanie N. Rotondo

Phoenix, Nov. 5 - The distressed debt market started the week off slow, as new issues and the election took focus.

One trader noted that volume in the entire high-yield space was around $1 billion, though he said he didn't think it seemed that active.

"Everyone is so focused on the election, so there's not a tremendous amount of stuff going on," another trader said.

Supervalu Inc. paper remained on the busy side, though without fresh news. Additionally, the bonds were better in line with the broader market.

Meanwhile, Clear Channel Communications Inc. was preparing a new issue via Clear Channel Outdoor Holdings on Monday. The proceeds will be used to tender other outstanding issues.

Clear Channel Outdoor's subordinated paper was moving higher in anticipation of pricing, but other Clear Channel paper was subdued, according to a trader.

Supervalu active again, higher

Supervalu's 8% notes due 2016 continued to be actively traded Monday, as investors await word on a potential sale of assets.

One trader said the bonds got as good as 97½ before falling back to 961/2, still up half a point on the day.

Another trader also saw the issue rising to the 97 area before coming back to end in a 96-97 context. He deemed that up half a point to a full point.

A third market source pegged the notes at 96¾ bid, up nearly a point.

The Eden Prairie, Minn.-based grocery store operator is currently fielding offers from such potential investors as Cerberus Capital Management and KKR. There has been no fresh word on the potential sale, nor any confirmation as to whether or not bidders are seeking the whole company, or just parts. However, Cerberus has been rumored to be interested in the whole and it has been reported that the firm has already been lining up financing for a deal that could be valued as high as $5 billion.

Clear Channel firms

San Antonio-based multimedia company Clear Channel was preparing a new $2.73 billion two-tranche issue of 10-year notes on Monday.

The proceeds will be used to fund a tender for the 9¼% series A senior notes due 2017 and its 9¼% series B senior notes due 2017.

On the back of that, Clear Channel's 7 5/8% notes due 2020 were on the rise, according to traders.

A trader said the issue earned a fraction of a point, ending at 971/2. Another trader called the debt up half a point, also at 971/2.

"All the other issues were on the quiet side," the second trader said.

Energy rises modestly

In the energy space, Energy Future Holdings Corp.'s 5.55% notes due 2014 were pegged around 55, up 5 points.

Petroleos de Venezuela SA's 9¾% notes due 2035 meantime ended at 831/4, up a touch on the day.

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