Delayed earnings report spurs drop in Hines Horticulture notes; Technical Olympic firms

By Stephanie N. Rotondo

Portland, Ore., March 28 - A delayed earnings report equaled losses in Hines Horticulture Inc.'s bonds Wednesday as a market source said the delay could mean poor results.

This is the second time in less than a month that the nursery supplier has delayed posting its fourth-quarter results. The first conference call to discuss the report had been scheduled for March 7. Wednesday's call was cancelled as well.

"Why even bother to schedule a call?" a market source said.

Separately, Technical Olympic USA Inc. is still making the rounds. The distressed homebuilder has seen losses on top of losses, but might see its bonds firming up.

A research report issued Tuesday indicated that if the Hollywood, Fla.-based company did have to acquire some or all of its joint venture's bank debt, there would be enough assets to cover it.

While still very active, according to market players, the company's bonds were seen virtually unchanged from Tuesday's close.

Meanwhile, Delta Air Lines Inc. is hoping to soar out of bankruptcy by the end of April, and its bonds are taking flight as well, albeit cautiously.

The bonds have seen slight gains over the week, as the company has announced its emergence date. The company has also filed its application with the New York Stock Exchange to have its new common stock listed.

Potential asset sales are also helping investor optimism in the distressed airline. The company has said it wants to sell some of its assets to boost shareholder value but has not indicated which assets it might let go.

In other asset sale news, Calpine Corp. has received numerous bids for some or all of its assets. The news prompted the power company's bonds to shoot up at least 1.5 points.

Hines Horticulture down

Hines Horticulture delayed releasing its fourth-quarter results for the second time in a month, which caused its bonds to retreat during trading.

A market participant pegged the 10¼% notes due 2011 at 75 bid, 78 offered. At another desk, a trader saw the notes down to 75 bid, 78 offered from 80 bid, 82 offered.

A trader did note that not a lot of bonds moved during the day, but "it was quoted a lot."

The company said it needed more time to complete financial audits, but it did not say how much additional time would be necessary. The nursery supplier delayed releasing its financials earlier this month, cancelling a March 7 conference call.

"They're dodging around," the market player said.

He noted that the second delay has sent up some red flags.

"Delay it once, OK, but delay a second time and people start to get nervous," he said.

The source also said that his sellside shop has a sell recommendation on the bonds; so, he is not too surprised by recent events.

Technical Olympic firms

Homebuilder Technical Olympic is continuing to be a name bandied about. Over the last few weeks, the company's bonds have lost weight faster than a binge dieter, but traders are seeing the notes firm up a bit.

A market player quoted the more active 10 3/8% notes due 2012 at 66 bid, 67 offered, essentially unchanged from Tuesday's close. He said the bonds were "bouncing around a little bit," trading up to 72 bid at midday.

"They are swinging all over the place," he said.

Another trader called the 10 3/8% notes up 1.5 points on the day, closing at 67.5 bid, 69.5 offered. He said he saw the notes as good as 5 points better at one point during the day, but the bonds gave up some of those gains.

The notes had fallen prey to subprime mortgage concerns, followed by a poorer earnings report - not to mention an even poorer outlook for 2007.

Investor concern that the company may be saddled with the bank debt of Transeastern, its joint venture with Falcone Group, took the notes on a roller coaster, as the notes lost as much as 10 points during the trading day, only to make up most of the losses.

Traders mixed on Delta

Delta is edging closer and closer to exiting bankruptcy, and its bonds are edging higher and higher - at least according to one trader.

A trader called the airline's 8.3% notes due 2029 "up a little bit" at 56. A market participant said he saw the notes earlier in the day at 55.5 bid, 56 offered.

However, at another desk, a trader saw the notes down 1.5 points at 55 bid, 56 offered.

The Atlanta-based company recently said it is looking to exit bankruptcy by April 30. Upon emergence from Chapter 11 protection, the airline intends to cancel old stock and issue new shares. The airline announced Wednesday that it had filed an application to list its new common stock - expected to be under the ticker symbol "DAL" by early May - on the New York Stock Exchange post-bankruptcy.

In other distressed airline paper, a trader called Northwest Airlines Corp.'s bonds down 1.5 points, pegging the 10% notes due 2009 at 84 bid, 85 offered.

A trader added that the airlines' tended to follow each other, which he said was true Wednesday as well.

"They were weaker in the morning and then rallied at the end of the day," he said.

Calpine powers up

On the news that it had received numerous bids for some or all of its assets, Calpine's bonds moved up 1.5 points. A trader called the 8½% notes due 2011 better at 109 bid, 110 offered.

The San Jose, Calif.-based power company began welcoming bids earlier this year for some or all of its assets as part of its bankruptcy process. The bids were due earlier this month.

As of yet, there is no indication whether the company will accept any of the offers.

Paul Deckelman contributed to this article.

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