Merisant boosted by refi news; Sea Container drifts; Tech sector steady; Delphi down

By Stephanie N. Rotondo

Portland, Ore., April 18 - Like bees to honey, investors were buzzing around Merisant Co.'s bonds Wednesday after an "upbeat" bank call boosted the notes by 4 points.

The company also announced a deal earlier this week to obtain a tack-on to its term loan. Credit Suisse Securities (USA) LLC will act as the lead arranger and bookrunner for the contemplated transaction.

Meanwhile, Sea Container Ltd.'s bonds seem to be floating along. A trader said the notes have not found a buyer and the current valuation is not precise. News that the company had made changes in management had previously affected the company's equity but has so far done little for the debt.

Technology sector concerns also had little effect on distressed chip makers ASAT Holdings Ltd. and MagnaChip Semiconductor LLC's bonds. A trader saw both papers unchanged, with very little turnover.

Meanwhile, threats that a private equity firm will pull out of a takeover deal has prompted Delphi Corp.'s bonds to lose ground. Continued wage discussions with the distressed automotive parts maker's unions and concern for profitability seem to be causing the firm to back off.

Refi news boosts Merisant

The day was a sweet one for Merisant's bonds, boosted by recent news that the company is obtaining an $85 million tack-on to the term loan B facility under the company's existing senior credit agreement.

One trader said the 9½% notes due 2013 were up by 4 points at 87, while another placed the notes at 86.5 bid, 87.5 offered. The latter also quoted the zero-coupon/12¼% discount notes up 7 points at 52.5 bid, 54.5 offered.

Proceeds from the deal will be used to prepay all outstanding debt under the existing second-lien credit agreement. The company also has plans to amend its senior credit agreement, an effort to provide more flexibility and to strengthen its balance sheet.

The bank call held to discuss the deal was touted as "upbeat" by a trader.

The Chicago-based sweetener producer will hold a conference call at 10:30 a.m. ET on May 2 to discuss its 2006 full-year financial results, released on March 23.

Sea Container notes drifting

Tuesday's equity surge did little to move Sea Container's bonds come Wednesday.

"I've been the seller on the Street," a trader said. "I can't find a buyer."

News that the company had made some changes in management also had little effect on the notes. The trader said there was a small print on the 10¾% notes due 2006 at 90.

"So it's up 3 points if you believe that, but I don't," he said. He figured the bonds to be more around the 88 bid, 89 offered context.

The trader agreed that investors believed there would be some recovery and even noted it could be possible for equity holders to keep some of their stake.

"That would assume that the company is going to stay listed as one company," he said, adding that the business had a "mish-mash of companies" under its umbrella.

But, given the various businesses held by the company, the trader said it was "likely it will be liquidated."

"As bondholders, we value them on an asset liquidation basis," he said.

Tech sector bonds steady

Poor earnings released by technology industry leaders like Yahoo Inc. prompted investors to be wary of the sector on the equity side, but the bond side stayed firm.

A trader said there was "no change" in ASAT Holdings's 9¼% notes, which he saw around 87.

The trader also said there was no change in MagnaChip's 8% notes due 2014, slated at 84 bid, 85 offered, with "virtually no turnover." He added that a Monday "sell-off" was due to uncertainty over upcoming first-quarter results.

At another desk, a trader pegged the senior notes at 84.5 bid, 85.5 offered.

ASAT posted its third-quarter fiscal 2007 results last month. MagnaChip is scheduled to release its first-quarter results next week.

Delphi bonds drop

In the distressed autosphere, Delphi was deemed "very active" by one distressed trader, pegging the 7 1/8% note due 2029 down 1.5 points at 109 bid, 110 offered.

At another desk, a trader saw the 6.55% notes due 2006 at 110 and the 7 1/8% notes at 109.625.The 6½% bonds due 2013 were down nearly 2 points at 108.125.

The trader said the drop was due to threats that Cerberus Capital Management LP may pull out of a $3.4 billion offer to buy the automotive parts producer. According to a Bloomberg report, sources close to the negotiations say the private equity firm is concerned the company cannot generate enough profits to make the investment worthwhile.

Ongoing discussions with the United Auto Workers union have also swayed the firm. The union has resisted wage cuts proposed by the firm, which they say in essential to the struggling company's survival.

But, Delphi could go another way: There is a rival bid of $4.7 billion by Dallas-based Highland Capital Management LP. Cerberus is also looking at acquiring bankrupt Tower Automotive Inc.

Broad market stable

Technical Olympic USA Inc's 10 3/8% notes due were seen in the 80 levels, a trader said.

"There's a drip feed of bonds coming out, and there's a buyer waiting for them," he said.

Meanwhile, a trader saw Fedders Corp. 9 7/8% notes due 2014 stabilizing at 45 bid, 47 offered. He wondered whether the company would release news soon but noted there was not "anything to say," calling the situation "puzzling."

The trader also mentioned that distressed automotive parts maker Dana Corp.'s bonds were trading "north of 80." A market source placed the 6½% notes due 2008 at 83.75, the 6½% notes due 2009 at 82 and the 7% notes due 2028 at 80.5.

As it gets closer to exiting bankruptcy, Delta Air Lines Inc.'s 8.3% bonds due 2029 are maintaining altitude, with one trader placing the notes at 61 bid, 62 offered. At another desk, a trader quoted the bonds at 61.25 bid, 62.25 offered.

Northwest Airlines Corp.'s paper was up "even a little more," a trader said. He pegged the 10% notes due 2009 up 1.5 points at 91, while the 7 7/8% notes due 2008 shot up 3 points to 93.

Paul Deckelman contributed to this article.

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