Six Flags up; Hines Horticulture off; Delphi firms; James River, Tembec earnings eyed

By Stephanie N. Rotondo

Portland, Ore., July 30 - After a hectic few days in the distressed bond market, prompted by a plunge on the equity side, Monday saw many names in the junk sector attempt to rebound.

"People are searching for liquidity," a trader said. "There was a lot of bouncing today."

"It looked as if things were rallying back," said another trader. "Things are all over."

The second trader deemed the session as one of "opportunistic buying." He said that, in general, bonds were up about 2 points on the day, even without any news driving the gains.

Six Flags Inc., which was beat down in last week's market slide, saw its notes come up a couple of points. The bonds had fallen significantly toward the latter part of the previous week, spurred by general market heaviness and disappointing quarterly results.

Delphi Corp.'s bonds were another issue that saw decent declines in the weakening market. However, the Troy, Mich.-based automotive suppliers' notes were "up a good bit," according to one trader.

Meanwhile, Hines Horticulture Inc.'s bonds were seen moving into their lows, as the company prepares to release its first-quarter results Tuesday. One trader, however, is not holding his breath.

"We didn't see the 2006 numbers until just recently," he said. In the past, the company has said it would release its figures, only to postpone or cancel the release altogether.

In the nest couple of weeks, several companies are expected to release financials, including Tembec Inc. and James River Coal Co.

Still, traders reported that, while prices were moving up, volume was off.

"People are concerned about being too levered," one trader explained. He noted that now was a good time to buy, given the lower values of most names.

Six Flags gains

Six Flags' bonds firmed slightly during the session, as one trader called the bonds up a couple points.

The trader pegged the 9 5/8% notes due 2014 - which closed Friday at 79 bid, 80 offered - at 81 bid, 82 offered.

The bonds fell several points in Friday's session as the company posted weaker quarterly results than had been expected. Admissions, however, gained 3%, which one trader had said was better than anticipated.

Autos firmer

The stock market plunge on Thursday saw Delphi's bonds dip as much as 10 points on the day, with some traders speculating that a Chrysler Corp. bank deal was hurting the company as well.

A trader quoted the 7 1/8% notes due 2029 around 113.5 after opening the day around 109. He said he had not heard any specific news on the automotive parts manufacturer.

In the rest of the distressed auto realm, Dana Corp.'s bonds were called "better as the day wore on."

A trader pegged the 5.85% notes due 2015 at a high of 88 in the afternoon, after moving as low as 86 in earlier trading.

"Some of these names were down hard at the end of last week," the trader said. "They definitely recovered a couple points from their lows."

Hines bonds lower

Nursery supplier Hines Horticulture's bonds were seen moving toward their lows, a trader said, as the company is expected to release its first quarterly results of 2007 on Tuesday.

The trader placed the 10¼% notes due 2011 around 71.5, which is where the first "real print" of the day traded. Mostly, he said, the bonds saw small trades.

Late last week, the company said it had received yet another communication from Nasdaq Stock Market, which gave the company a cure period to regain its compliance status.

The notice - the second the company has received this year - stated that Hines was not in compliance with listing requirements, given that James Tennant - the new chief executive officer and president - had left his seat on the audit committee.

However, according to the letter, the company has until the next annual stockholders meeting or July 17, 2008, or if the next stockholders meeting occurs before Jan. 14, 2008, until Jan. 14, 2008 - whichever comes first - to fix the problem.

More earnings on tap

James River Coal is expected to release its second-quarter results on Aug. 8. A trader saw its bonds, the 9 3/8% notes due 2012, trading with a 79.5 bid, adding that only small trades occurred during the session.

Forest products company Tembec will post its second-quarter numbers on Thursday. The trader placed the 8½% notes due 2011 at 43 bid, 45 offered, up slightly from Friday's close.

Broad market mixed

Linens n'Things floating-rate notes due 2014 were called "up a point" at 64 bid, 65 offered. At another desk, however, a trader called the bonds up by 4 points on the day to around 65, noting that they had opened around 61.

A trader saw Technical Olympic USA Inc.'s 10 3/8% notes due 2012 around 58.75 and the 9% notes due 2010 at 80.5.

"Woo-hoo," he quipped.

Meanwhile, Realogy Corp.'s 12 3/8% senior subordinated notes due 2015 were seen at 80 bid, 82 offered. The notes were released in April and priced just over 98.

"What a dog that is," a trader said.

155 East Tropicana LLC, also known as Hooters, was seen slightly lower at 99.75.

Swift loan stronger

Swift Transportation Co. Inc.'s term loan B continued to strengthen on Monday after last Thursday's sell-off, as the distressed market in general was better, according to a trader.

The term loan B went out at 89½ bid, 90½ offered, up from Friday's closing levels of 88 bid, 89 offered, the trader said. Last Thursday, the paper ended at 86 bid, 87 offered, and on Wednesday, the paper was being quoted at 91 bid, 92 offered.

No specific reason was given for last week's downfall, other than the overall market was plummeting, but levels started to bounce back up on Friday on the heel's of the company announcing some financials that were better than people had expected.

The company said that as of June 30, its cash balance was $171 million, of which $148 million is currently unrestricted, and credit available on its revolving line of credit exceeded $250 million.

The company also said that its EBITDA for the second quarter exceeded revenue and EBITDA reported for the first quarter of 2007.

Second-quarter financial results will be released to bank lenders and noteholders after the market closes on Aug. 14.

Swift is a Phoenix-based truckload carrier.

Movie Gallery loan better

Movie Gallery Inc.'s first-lien term loan finally reversed its direction, gaining a couple of points on market technicals, according to a trader.

The Dothan, Ala.-based video rental company's first-lien term loan ended the day at 85 bid, 86 offered, up from 82 bid, 84 offered on Friday, the trader said.

The bank debt was pressured last week not only by the overall secondary weakness but also by Blockbuster Inc.'s disappointing earnings results.

Sara Rosenberg contributed to this article.

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