Dana, Delphi bonds seen better; Calpine up on numbers; Hooters firms; Technical Olympic USA slips

By Stephanie N. Rotondo

Portland, Ore., May 9 - It was a reasonably active day in distressed automotive names, a trader said Wednesday, with both Dana Corp. and Delphi Corp. edging up.

The trader said he was unsure why the bonds moved up, which another trader echoed. However, fresh news was released on Dana during the day, while Delphi had news out earlier this week.

Improved numbers could have been the reason why Calpine Corp.'s bonds were seen "fairly stronger" on the day. The company narrowed its first-quarter loss, compared with the same quarter a year previous.

Casino and hotel operator 155 East Tropicana LLC, also known as Hooters, made its way back into the headlines by announcing that the company had amended its recently released purchase agreement.

The bonds pushed up a bit on the news, but one source was skeptical that the deal would even come to fruition.

Meanwhile, Technical Olympic USA Inc.'s bonds slipped while market participants waited to see the company's first-quarter results. Investors were expecting to also hear where the company's Transeastern JV debt would fall.

The results were not available at press time.

Dana moves up

Dana's bonds were called "up about a point" by one trader, who pegged the 7% notes due 2028 and the 7% notes due 2029 at 84 bid, 85 offered.

"They just went blip up," he said. "I don't know why."

Another trader said he also saw some activity in the bonds, but could not explain the move.

The Toledo, Ohio-based automotive parts manufacturer said it would ask for court approval to buy back its Stockton, Calif., and Danville, Ky., plants, to the tune of $7.44 million. The company currently rents the space from a subsidiary that is not in bankruptcy.

The company said that the purchase would mean an increase in income and eliminate rental expense from the accounting books.

In the filing, the company also stated that a quick closing would also allow the facilities to be used as collateral for exit financing.

The court overseeing the company's bankruptcy case is expected to rule at a May 23 hearing.

Delphi better

Elsewhere in the autosphere, Delphi's bonds were also seen firming. A trader said the 8¼% notes due 2033 "lifted to near 120." Another trader quoted the notes at 119.75 bid, 119.875 offered.

The company is looking to receive what is being called a "final" offer from its unions, perhaps sometime this week. Talks have been ongoing between the groups since earlier this year.

Calpine stronger

Calpine's bonds were "all fairly stronger," a trader said, as the bankrupt power company posted a narrower quarterly loss.

He said the "more active" issue was the 4¾% convertible, which he quoted at 111.5 bid, 112 offered.

The trader also saw the 7¾% notes due 2015 at 125.5 bid, 126 offered, which was essentially unchanged.

Another trader said he saw the 8½% notes due 2011 at 119.5, down slightly from the morning's market of 120 bid, 121 offered.

When asked, the first trader said the bonds could have moved on the numbers.

"The numbers weren't bad," he said. "They were improved."

The San Jose, Calif.-based company posted a net loss of $459 million, compared with the previous year's loss of $589 million.

Hooters firms

Hooters was back in the news Wednesday, amending the recently announced purchase agreement to include a $1 million non-refundable deposit - which will be used toward the greater purchase price if the deal closes - from Hedwigs Las Vegas Top Tier, LLC, an affiliate of the investment group led by NTH Advisory Group, LLC.

A trader pegged the casino operator's 8¾% notes due 2012 at 97 bid, 98 offered.

"There could still be people covering shorts, or maybe some really believe in this," he said.

However, the trader indicated he is not holding his breath that the deal will go through.

"As everyone knows, that's a big if at this point," he said.

According to the trader, the company has done this before: prepared for a purchase, asked for more in deposit money, then the deal fell through.

Under the current agreement, the buyer will purchase the hotel for $95 million plus the assumption of debt. The agreement, according to the trader, states that the deal is subject to "due diligence and financing."

"I could buy a Rolls-Royce subject to financing, too," he quipped.

Technical Olympic slips

Homebuilder Technical Olympic's bonds slipped a little during trading as investors and market players waited for the company to release its first-quarter earnings.

A trader, who said the company's bonds were "more widely quoted," pegged the 10 3/8% notes due 2012 at 77.25 bid, 77.75 offered. He said the 7½% notes due 2015 came in at 67 bid, 68 offered and the 7½% notes due 2011 at 71 bid, 72 offered.

He also saw the 9% senior notes due 2010 at 94.5, which he said "had faded from the 97 level."

Still, the trader said he did not see a lot of actual trades in the name.

"People are a little skittish because of the lack of information from the company," he said. "But there was definitely more activity in the Street."

At press time, the Hollywood, Fla.-based company's numbers had not been released yet, although a press release issued earlier this month said the financials would come out after the close of market. A conference call is scheduled for 10 a.m. ET Thursday.

Broad market mixed

Tembec Inc.'s notes firmed during trading, with a trader calling the 8 5/8% notes due 2009 at 63 bid, 64 offered.

At another desk, a trader said Fedders Corp., as well as Primus Telecommunications Group Inc., bonds were unchanged on the day, though he expected some movement in Fedders on Thursday, when the company is expected to release its quarterly numbers.

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