Dura bonds active, move up; Remy better; 'Big buyer' boosts Calpine; Bon-Ton dips

By Stephanie N. Rotondo

Portland, Ore., May 24 - The automotive sector was the most talked about in the bond market Thursday as both Dura Automotive Systems Inc. and Remy International Inc. continued their drive upward.

Traders attributed Dura's recent moves to rumors swirling throughout the market, though one trader said he was hearing "mixed" messages.

Remy's subordinated bonds reportedly saw light trading volume during the day but were still touted as being up as much as 20 points over the week.

Meanwhile, a trader is speculating that one "big buyer" is responsible for gains in Calpine Corp.'s bonds. The notes were seen losing earlier in the week but started to rebound Thursday to close almost 2 points higher.

Furniture and apparel retailer Bon-Ton Stores Inc. saw its debt slip a bit after the company posted a wider loss for the first quarter of 2007. Still, the bonds attempted to come back from their lows but still closed lower on the day.

Overall, traders said the day was "very quiet," as many market players were not at their desks ahead of the long weekend.

"Nothing is going to happen until Tuesday," one trader lamented.

Still, another said he was pleased with the day's activity.

"It made it worth coming in at least," he said. "Tomorrow is another question."

Dura debt gains

Dura Automotive's bonds were deemed "pretty active," a trader said, prompted by market buzz that the company has found someone willing to backstop a rights offering.

The trader quoted the 8 5/8% notes due 2012 at 48 bid, 50 offered, "maybe even higher." He said the bonds last traded at 51.

The trader also saw the 9% subordinated debt due 2009 up at 11 bid, 12 offered.

"It's been a good week for the name," he said, adding that there is also talk that the company will sell its recreational vehicle business.

Another trader said he saw the senior bonds last trade at 49.125, but he had not heard why the notes were improving.

At another desk, a trader called the 8 5/8% notes better at 50, while the 9% closed at 11.25 bid, 12 offered.

And yet another trader also said he had heard the rights offering rumor, quoting the seniors up 3 or 4 points on the day in the 50 level. He added that the bonds gained about 15 points over the week.

The trader also noted that the company had a meeting earlier in the week with financial advisers for its unsecured creditors.

The company was expected to release its quarterly numbers Thursday, but at press time, the results were not available. The company had said in a Securities and Exchange Commission filing May 15 that it would have to delay posting its results due to that fact that its 2006 annual report had yet to be filed.

Remy revs up

Elsewhere in the autosphere, Remy bonds continued to move upward, a trader said, noting the bonds have had a "heck of a run."

The trader pegged the 11% notes due 2009 as "pushing 60," though on light volume. He said the 8 5/8% notes due 2007 closed at 97 bid, 97.5 offered, attributing the gains to the company working out its restructuring plan.

"The beaten up auto bonds have been moving a little bit," a distressed bond trader said. He also saw the subordinated debt around 60, which he said was "up where they've been, but in the last few days, they have moved from 40 to 60."

Calpine bonds boosted

A "big buyer" is what has caused Calpine's bonds to get better, a trader said.

"Folks just continue to suck up all those bonds," he said.

The trader called the debt about 1.5 points better across the board, with the 8½% notes due 2011 at 132.5 bid, 133.5 offered, the 8 5/8% notes due 2010 in the same level, and the 8½% notes due 2008 at 126 bid, 128 offered.

The trader said he had not heard any fresh news on the company.

Bon-Ton notes dip

York, Pa.-based Bon-Ton Stores' notes were seen initially off a point as the company released its quarterly results, which a trader said were "not very good."

The trader said the 10¼% notes due 2014 did rebound a little but still closed the day about half a point down at 106.

The company posted a net loss of $29.3 million for the first quarter of 2007, compared with a net loss the previous year of $10.8 million.

The department store chain, which acquired Carson's last year, said it would not see a "normalized" year until 2008, due to the integration of the acquisition.

The company also said it expects fiscal 2007 earnings to fall in the lower end of the guidance it had previously given.

Broad market mixed

Winn-Dixie Stores Inc.'s stubs were called a "tad weaker" at 12.25 bid, 12.5 offered, off the recent highs. A trader attributed the dip to the stock falling slightly and the long upcoming weekend.

At another desk, Dothan, Ala.-based Movie Gallery Inc.'s bonds were pegged 2 to 3 points better by one trader, which he saw at 87. Another trader also said the notes were up 2 to 3 points at 87.5. The trader said the market was buzzing that the company is "supposedly" preparing to announce a debt-for-equity swap.

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