Dana bonds firm on union agreements; TOUSA seniors trade; Movie Gallery notes better

By Stephanie N. Rotondo

Portland, Ore., July 6 - The last day of the holiday week was reportedly the quietest, according to those traders who were at their desks Friday.

"It is completely dead," one trader said. "It's worse than [Thursday]."

"I don't think anybody needed to be in," said another, who added that many - if not most - market players were not around.

Still, of those who were in the office, most agreed on what names attempted to fill the void.

On the news that it had reached agreements with its unions and a private equity investor, Dana Corp.'s bonds were seen firming around 2 points.

The deal with the unions aims to reduce operating costs as the company moves toward exiting bankruptcy. Once out of Chapter 11 protection, a private equity firm will invest up to $500 million in the reorganized company.

Elsewhere, Technical Olympic USA Inc.'s 9% senior bonds due 2010 were seen trading, though they were called unchanged. There is no fresh news out on the company.

After having spent the beginning of the week as the most active name, Movie Gallery Inc.'s bonds were a bit quieter, though still fairly active. One trader said he saw the bonds up a little on the day, indicating that the company's bank debt held more interest for market participants.

Dana debt firms

As automotive parts manufacturer Dana announced that it had reached several agreements with its unions, as well as with an investment partner, traders reported that the bonds firmed a little on the day.

One trader saw the bonds up in the "neighborhood of 1 to 2 points," with the 7% notes due 2009 moving at 102 bid, 103 offered and the 5.85% notes due 2015 around 98.

At another desk, a trader said the bonds saw "decent volume," with the 6½% notes due 2008 at 105 bid, 106.5 offered. As for the wide range, he said it was likely that there were more offers than bids.

The Toledo, Ohio-based company said in a press release Friday that it had come to terms with the United Auto Workers and United Steel Workers in a deal that would reduce labor costs as well as replace the company's health care and long-term disability obligations.

Dana also said that it had entered into an agreement with Centerbridge Capital Partners, LP, under which Centerbridge will invest as much as $500 million in cash for convertible preferred stock in the reorganized company. The deal also states that Centerbridge can facilitate an additional $250 million investment from other investors.

TOUSA notes steady

Technical Olympic's bonds were seen trading during what was called the quietest day of the holiday week, though they were deemed essentially unchanged.

A trader pegged the 9% notes due 2010 at 95, while another trader said he saw the notes at 95 bid, 95.25 offered.

There has been no fresh news from the Hollywood, Fla.-based homebuilder since the June 29 announcement that it had reached an accord with the lenders of its Transeastern joint venture.

Movie Gallery bonds better

After spending most of the week in the limelight, Movie Gallery's bonds quieted down a bit but still remained fairly active.

A trader quoted the 11% notes due 2012 in the low- to mid-20s, adding that the bonds were not as active as they had been in earlier sessions.

"Everybody is trying to reevaluate the situation," he said.

Another trader said the debt was up a bit with a "wide range" of 22.5 bid, 24.5 offered.

"I think there is more interest in the bank debt," he said, noting that the Dothan, Ala.-based movie rental chain's term loan were senior to the bonds, giving holders of that paper "more control in restructuring."

Still, the first trader said he expected the bonds to get active again come Monday.

Interest sparked in stubs

A trader said there was "continued interest" in Delta Air Lines Inc.'s 8.3% stubs, speculating that market players might think there are additional recoveries.

The trader said he saw a 7 bid on the stubs.

Among other stub issues, the trader said he saw Mirant Corp.'s 2½% stubs trading at 7.

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