Fedders edges higher on market buzz; Dura gains; MAAX better; Fremont closer to par

By Stephanie N. Rotondo

Portland, Ore., May 23 - Fedders Corp. is staging a comeback after last week's drop in its debt, gaining yet another couple of points on Wednesday.

A trader said the bonds have picked up at least 5 of the points it lost after a bondholder call Friday sent the notes into a downward spiral. The recent gains have been attributed to market speculation that liquidation could result in a valuation of 40. According to the trader, that is not new news, but maybe investors are giving the buzz more credence.

Meanwhile, Dura Automotive Systems Inc. saw big moves in its senior bonds, garnering as much as 6 points during trading. A trader said the company is expected to post quarterly results Thursday, but could not say whether the figures would be good or bad.

Quarterly numbers are supposedly helping boost MAAX Corp.'s debt. The numbers, however, are not their own, but a competitor's.

Tuesday's news that it would sell part of its loan business is continuing to help Fremont General Corp.'s bonds, with traders reporting the notes moved closer to par.

Traders reported a "bullish" yet quiet day, with many market players away from their desks. Some were taking advantage of the upcoming long weekend and had taken off early, while others, particularly those involved with hedge funds, were attending a big fundraiser in Manhattan.

"The people moving the markets are not moving the markets today," a trader said.

Fedders edges higher

Fedders' bonds are continuing to make their way toward the 40 mark, with one trader pegging the 9 7/8% notes due 2014 at 39 bid, 40 offered.

The trader called the hiring of the Blackstone Group as advisers "interesting," and could be the catalyst for the bonds' climb.

Another trader called the notes 1.5 points better at 39.25, a 5-point rebound since the beginning of the week. He said the recent buzz that, in the event of liquidation, the debt could be worth 40 is what is driving the bonds higher.

"It is an old theme, but it may be getting more attention," he said.

But, he was not ready to jump on the bandwagon just yet.

"The problem is, for the bonds to be worth 40, they need to file bankruptcy right now and that is not going to happen," he said. Therefore, "that argument is flawed."

In the meantime, he said, the Liberty Corner, N.J.-based producer of air quality solutions is just piling up debt on top of debt.

"They need to keep some cash in the war chest, but they are not doing that," he said.

Dura climbs

A trader saw Dura Automotive's senior paper make a "huge run" on the day, gaining 6 points ahead of Thursday's numbers release.

"I don't know why they are up today [ahead of the release], but they are," he said.

He pegged the 8 5/8% notes due 2012 at 46.5.

The trader said he had not heard anything about the upcoming financials, so he could not speculate whether it would be good or bad news.

The Rochester Hills, Mich.-based automotive parts maker came under fire earlier this week from its unions. The union has stated that the company's top executives will receive millions of dollars in bonuses, even if the company fails to hit its financial goals.

In fact, the union said that executives have already received several bonuses, despite the company's ability to post a profit.

However, Dura's creditors have agreed to the bonuses, including an upcoming payout of about $4.4 million, pending court approval at a May 30 hearing.

The company is also slated to unveil its new business plan on May 31. The company also is expecting to file a reorganization plan early in the fourth quarter.

MAAX gains

Bathroom fixtures manufacturer MAAX saw its bonds gain 2 points, a trader said. He quoted the 9¾% notes due 2012 at 67 bid, 68 offered.

The trader said the increase was attributed in part to a competitor, Masonite International Inc., reporting good quarterly numbers. He also said there was a "short squeeze" in the debt.

Calls made to MAAX to find out when the company would post its next quarterly report went unreturned Wednesday. The Canadian company's third-quarter 2007 results were posted in January.

Fremont closer to par

Savings and loan Fremont General is seeing its bonds continue to climb after Tuesday's news that the company would sell its commercial real estate lending business as well as a minority stake in the bank business.

A trader said the financial institution's 7 7/8% notes due 2009 were trading at 99 bid, par offered at one point during the day, while another pegged the notes at 99.75.

On the equity side, the stock was up another $2.67, or 26.70%, to $12.67.

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