Trump bonds gyrate; Delphi continues to slide; TransMeridian boosted; James River dips

By Stephanie N. Rotondo

Portland, Ore., Nov. 2 - The flurry of trading activity mid-week died out Friday, but the distressed market was still seen softer yet again.

"The market is generally weaker," a trader said. "It's just continuing its slide from [Thursday], though it's not as violent."

The trader added that there were "not a lot of names jumping off the page."

Trump Entertainment Resorts Inc.'s bonds were fairly active as reports that a possible takeover deal was kaput surfaced. The bonds initially traded as much as 4 to 5 points lower but managed to come off the lows to close just 2 to 3 points down.

Meanwhile, Delphi Corp.'s debt has been sliding throughout the week, and Friday's session was no different. The bonds fell by another couple of points, and the company announced that it was looking to extend its bankruptcy loan.

News of a possible sale soon had investors pushing up TransMeridian Exploration Inc.'s bonds. The company has been looking for a buyer for the last few months, and market sources have speculated over the weeks that a sale could be looming - perhaps to a Chinese customer.

James River Coal Co. posted a wider loss for the third-quarter and said it would raise $30 million in capital to help pay down its revolver. The coal producer's bonds dropped about 2 to 3 points on the day.

The big news of the day, according to market players, was what was dubbed as the "Merrill debacle." Reports published Friday said that the investment group had hidden several million dollars in write-downs through various hedge funds. One trader said that the news would "definitely" have an effect on the larger market.

"There will be SEC investigations into everything, and other broker/dealers may be doing similar [things]," the trader said.

At another desk, a trader said he had heard a rumor that speculated Goldman Sachs was among that group.

Trump bonds erratic

Trump's bonds gyrated during the last session of the week, as it came out that a takeout deal had gone awry.

A trader said the 8½% notes due 2015 dropped to 80 bid, 81 offered from the previous closing levels of 84 bid, 85 offered. He added that the bonds came up off their lows to end the day 2 points lower at 82 bid, 83 offered.

Another trader called the debt down 2 to 2.5 points at 82.5 bid, 83 offered.

"That pretty much dominated the morning," the first trader said of the activity in the casino operator's bonds.

The trader said that it was not a big surprise that the deal fell through - it has happened before. He attributed the gyrations in the bonds to an initial shock - but then the market corrected itself when it realized it had seen this happen before.

New Jersey's Star-Ledger cited unnamed sources who indicated that talks between Trump and real estate developed Cordish Co. had ceased, as Cordish's financial backer, Goldman Sachs Group Inc., did not seem too excited about a prospective deal.

But earlier this year, the Atlantic City hotel and casino said it would stop looking for buyers, as several attempts to sell its assets failed. The company, which posted a higher third-quarter profit on Thursday, exited bankruptcy in 2005.

Delphi slips...again

The end of the week provided no relief for Delphi's bonds, which have been posting losses for the last several sessions.

A trader called the name "busy," with the 7 1/8% notes due 2029 falling another couple points to 85.5 bid, 86 offered. Another trader said the 6½% notes due 2013 were likewise weaker at 84 bid, 85 offered.

On Friday, the Troy, Mich.-based automotive parts supplier said it would ask the court overseeing is bankruptcy case to approve extending its debtor-in-possession loan until June 30, 2008. The facility currently matures Dec. 31.

Earlier in the week, Delphi said it was having issues obtaining exit financing due to a credit crunch sweeping the marketplace. As such, the company said it would likely not make its year-end bankruptcy exit goal and would also have to cut payouts to some of its creditors.

The company plans to put the extension request before the court on Thursday. An amended reorganization plan will also be presented at that time.

Elsewhere in the automotive realm, Federal-Mogul Corp.'s bonds were deemed "a little lower" around 86.5.

TransMeridian boosted by sale news

A pending sale pushed TransMeridian Exploration's bonds about 3 points higher, a trader said.

The trader quoted the 12% notes due 2010 at 98 bid, 98.25 offered, up from around 95.

Another trader said the bonds were "wrapped around 98," up about a half to a full point from the previous session. He added that the bonds had gained before that event about 1 to 1.5 points.

"It goes in fits and spurts so it's obviously in one of its fits," the trader said of the activity in the name.

The company announced in mid-summer that it was looking for buyers. On Friday, the oil and drilling company said it had received several non-bonding bids and was entering into negotiations with prospective buyers.

Still, "we don't know what price they will sell for," a trader said.

James River dips

James River Coal's bonds dipped as the company announced its third-quarter results and said it would try to raise cash to pay down its revolver in the fourth quarter.

A trader pegged the 9 3/8% notes due 2012 down at 81 bid, 82 offered, noting that they had been in the upper-80s.

The steam and coal producer posted a net loss of $9.7 million for the third quarter of 2007, compared to a net loss of $8.4 million for the same period the previous year.

Still, the company remained hopeful as coal prices have started to increase and mine production was good.

In its conference call Friday, the company said it plans to raise $30 million of capital through an equity security issue in the fourth quarter. Proceeds from that will be used to pay down its revolver, which currently has a balance of about $15 million.

Tousa notes unchanged

A trader said activity in Technical Olympic USA Inc.'s debt was "quiet" - a change from the excitement earlier in the week.

The trader deemed the bonds unchanged, with the 10 3/8% notes due 2012 at 10 bid, 12 offered.

"And it's still trading with interest," he said. "That's comical."

The trader also saw the 9% notes due 2010 at 48 bid, 50 offered and the 8¼% notes due 2011 at 49.5 bid, 50.5 offered.

Meanwhile, Standard Pacific Corp.'s 7% notes due 2015 were down a point around 72.5, as Standard & Poor's downgraded the company's debt.

Primus weaker

Primus Telecommunications Group Inc.'s 8% notes due 2014 traded off at 60 bid, 62 offered, which a trader called down 5 points on the week.

"Nobody seems to know why [the bonds are off]," the trader said. With numbers due out Monday, "I don't think anyone is expecting anything bad," he said.

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