Trump, Tropicana hit by declining revenues; True Temper boosted by 1Q sales; Tribune slips

By Stephanie N. Rotondo

Portland, Ore., Feb. 11 - Depending on whom you asked, trading in the distressed bond arena Monday was either relatively light or surprisingly active. But one thing was for certain: Almost everything was lower.

"Everything is lower today," said one trader, who categorized the day as "pretty active." "It is just a weak, crappy market."

Another trader agreed that things were weaker, but said there was "not much volume."

A decline in revenues hurt Trump Entertainment Resorts Inc. and Tropicana Entertainment LLC, also known as Wymar Operating. Atlantic City casinos as a whole reported a dip in January revenue - the total monies taken in from gamblers, not profit - as newer gambling centers in Pennsylvania and New York took their share of the customers. Trump's debt lost at least a point, while Tropicana felt the push not only in its corporate debt, but its bank debt as well.

Ames True Temper Inc. was one of the few names to buck the downward trend. The company's bonds headed to higher ground after its first-quarter numbers were released. The world's largest manufacturer of non-powered lawn and garden tools narrowed its quarterly loss with the help of a 16% increase in sales.

Meanwhile, Tribune Co.'s notes continued their descent, a trader said. The bonds have been declining since last week, when Standard & Poor's placed the media company on CreditWatch.

There was no real news that put pressure on Realogy Corp.'s bonds. Nonetheless, the bonds lost several points during the session, and some are calling the LBO deal worthless.

Trump, Tropicana hit on declining revenues

Atlantic City casinos headed downward after a citywide monthly revenue report showed new gaming centers in Pennsylvania and New York were stealing some of the profits.

Traders reported Trump Entertainment's 8½% notes due 2015 slipped at least a point during the session to 68 bid, 69 offered. Another source placed the bonds 1.5 points lower at 69.5. A market source at another desk reported some fairly brisk trading in Trump just above the 68 level.

Tropicana's bonds, however, were "beat up," a trader said. The trader deemed the 9 5/8% notes due 2014 down a couple points around 54.

Another trader saw the paper offered at 56, noting that the bonds started the day at 56.5 bid, 57.5 offered.

At another desk, a trader saw the notes down 5 points on the day at 53 bid, 45 offered.

Tropicana's first-lien term loan also weakened during market hours. The loan was quoted at 95¼ bid, 96½ offered, down a quarter to a half a point, a trader said.

All 11 casinos on the New Jersey shore reported a decline in January revenue, falling 10% overall. Tropicana posted a 21.1% decrease, as well as one of Trump's properties, Trump Marina Hotel Casino. Trump's famous Taj Mahal slipped 7.8%.

Since the opening last year of casinos in outlying areas, Atlantic City has seen its numbers falter. The January figures are the 12th time in 13 months that the casinos have lost revenue.

Overall, the casinos took $355 million from gamblers.

Adding insult to injury, Tropicana is facing a court fight with its bondholders, which are alleging that the property's turnover to a trustee constituted a default.

The casino operator was forced to turn itself over to a court-appointed trustee after the New Jersey gaming commission denied a license renewal request. The company was then forced to put the Atlantic City property up for sale.

But the company is denying that the turnover resulted in a default, stating that the group has placed "an undeserved pall over Tropicana's finances." The company further claims that the default accusation is interfering with a sale of the casino.

Good sales boost True Temper

While some are lamenting the onslaught of cold weather and snow this winter, Ames True Temper is applauding it. The company attributed an increase in snowfall throughout North America for its better sales for the first quarter of 2008.

"Significant snowfall in Canada and much of the U.S. contributed to the strong retail demand for our snow products at major retailers versus the same period in the prior year," said Rich Dell, president and chief executive officer, in a press release.

For the period ended Dec. 29, 2007, True Temper posted net sales of $98.8 million, compared to net sales of $84.9 million the previous year. The better sales figures resulted in a narrower net loss at $3.8 million, compared to $9.2 million for the first quarter of fiscal 2007.

The positive numbers boosted the company's debt. Last week, the 10% notes due 2012 were seen declining slightly on rumors that the company had hired, or was in the process of hiring, a financial adviser.

A trader said the bonds hit a high of 49 on the day, after closing Friday at 47.

"They've actually moved up from their lows last week," he said.

Another trader quoted the debt at 48.5 bid, 49.5 offered.

"You just don't see those that often," he said of the infrequently traded paper.

Still, the company is not resting on its laurels.

"While we are pleased with our first-quarter results, we are continuing to monitor customer demand and working capital requirements as a result of the downturn in the U.S. housing market and its impact on the U.S. economic environment," Dell said in the release.

Tribune paper continues to slide

Chicago-based media company Tribune saw its debt "continue to deteriorate," a trader said, following news last week of that Standard & Poor's had placed the company's debt under review.

The trader said the 5¼% notes due 2015 were "straddling 40" in Monday trading, after closing Friday around 43.5 and ending Thursday at 46.

The trader added that there was not much volume in the name.

S&P said on Friday that it placed the company's bonds under review as declining advertising revenues plagued the publication.

Realogy: A worthless LBO?

Realogy paper slipped a few points in trading, though it was unclear what sparked the move.

A trader quoted the 12 3/8% subordinated notes around 54, a number echoed at another desk as well.

A second trader placed the 10½% notes due 2014 at 69.75 bid, 70.25 offered and the 11% toggle notes due 2014 at 60.5 bid, 61.5 offered.

Given the company's private status, fresh news related to the name is rarely seen. However, in early February, a Bloomberg report mentioned the name as one of several companies purchased in the LBO craze of 2007 that is now causing its purchasers pain. Apollo Management bought the provider of real estate and relocation services in April of last year for $6.6 billion. At the current trading levels of its corporate debt, it is felt that the deal is all but worthless.

Broad market mostly lower

Bon-Ton Stores Inc.'s 10¼% notes due 2014 fell a point to 64 bid, 66 offered after ending last week at 65.5 bid, 66.5 offered.

Charter Communications Inc.'s paper "continues to feel heavy," a trader said, quoting the 11% notes due 2015 around 66.

A trader said Idearc's 8% notes due 2016 "hung in there," closing at 73 bid, 73.5 offered. He noted that the bonds were down from the high-70s last week and got as high as 74 bid, 76 offered during Monday's session.

However, another trader quoted the bonds at 72.5 bid, 73 offered, "down almost 5 points on the day," noting that a few days ago, the paper was in the mid-80s and was trading around 90 at the beginning of the month, so "that's really ugly."

Sara Rosenberg and Paul Deckelman contributed to this article.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.