Technology was the big loser through last Thursday, though weakness was widespread following the equity slump. Allied Waste softened ahead of new issuance.Fleming andHealthSouth saw heavy selling yet again. Here is other selected action.
Nextel Rally Comes Apart
Nextel Communications' 9.375% notes of '09 (B3/B), dropped four points to a 76.75 bid after Jim Mooney, the coo of the wireless carrier, resigned without explanation.
Joe Galzerano, analyst at CIBC World Markets, remains bullish on the credit, as leverage is declining and EBITDA continues to grow.
Cablevision, Charter Drift Upward
The cable sector was among the few gainers last week. Cablevision Systems' 7.625% notes of '11 climbed as high as 89, but were dragged down by the broader market and went out Thursday up two points at an 85.5 bid. Charter Communications' 8.625% notes of '09 (B2/B+) were 1.5 points better at 68.5. Brendan White, portfolio manager at Fort Washington Investment Advisors, believes "people are realizing Cablevision and Charter are not Adelphia."
Lucent, Nortel, Lead Tech Trouncing
The technology sector got clobbered last week, following woeful earnings revisions by Lucent Technologies and Nortel Networks. Lucent's 7.25% notes of '06 (B2/B+) were down 10 points to 49, while Nortel's 6.125% notes of '06 (Ba3/BB-) dropped some seven points to 39. Solectron, which relies heavily on business from Nortel, saw its 9.625% notes of '09 drop six points to 86.
A bulge bracket technology analyst says the market was stunned by the speed with which the slowdown in telecom spending hit Lucent, which saw revenue drop 20-25% for its fiscal fourth quarter versus the previous quarter. Analysts had been expecting revenues to be down 10% at the very worst, he says.