Last week saw softness overall in the high-yield market. Junk desks even handled investment-grade names such as WorldComand Ford Motor Co.Here was other action.
Wireless Weaker
Bonds of wireless companies were weaker as Sprint PCS lowered earnings guidance. Nextel Communications' 9.375% notes of '09 (B1/B) fell to 60 before returning to a 65 bid. They had started the week at 72. AirGate PCS 0/13% notes of '09 fell seven points to a 62 bid. Alamosa 0/12.875% notes of '10 fell seven points to 49. Rural Cellular 9.75% notes of '10, issued at par just over two weeks ago, had dropped to an 89 bid by Thursday afternoon.
A wireless analyst says he believes all of these bonds are money good, and that the market is skittish due to Enron-related worries and companies lowering growth projections. He says wireless companies continue to get more profitable with every quarter, and have plenty of access to capital.
Calpine Sinks On SEC Investigation
Calpine's 8.5% notes of '11 slid from an 83 bid to 74 after the company announced it was being investigated by the Securities and Exchange Commission regarding its financial disclosures. A West Coast buy-side energy analyst says the company is taking steps to improve its disclosures, and he believes the bonds will rally.
Charter Communications Softens
Charter Communications 8.625% notes of '09 (B2/B+) sank 1.5 to two points to 92.75. A trader says weak subscriber numbers from Comcast may have contributed to the damage in a generally skittish market, even though such information is ordinarily interesting only to stockholders.