Charter bonds do better on numbers; Idearc bounces off lows; WCI recovers a little

By Paul Deckelman and Sara Rosenberg

New York, Aug. 5 - Charter Communications Inc.'s bonds were seen better after the St. Louis-based cable operator reported a smaller second-quarter loss versus a year ago, as well as better adjusted EBITDA and revenue figures.

Elsewhere, traders saw Idearc Inc.'s bonds improved a little from the lows which the Dallas-based telephone directory publisher's paper had hit on Monday, when it edged below the 39 level for the first time on continued investor angst about poor earnings figures reported last week.

Also on the upside, WCI Communities Inc.'s bonds were a little better from the lows to which they sank Monday after the company's Chapter 11 filing.

In the bank-debt market, automotive credits like General Motors Corp., Ford Motor Co. and Chrysler Financial all saw an improvement in their levels. GM and Ford bonds, and those of their respective auto loan finance arms, were also up, recovering from their recently oversold levels.

Charter gains after reporting lower loss

Charter Communications paper was seen better pretty much across the board, helped by the company's improved performance in the most recent financial quarter.

A trader said "there was some activity around some of this Charter paper, with the numbers." He saw the bonds "a bit higher" after the quarterly results. "There seemed to be a buzz around that stuff."

Another trader said "there was some activity post-numbers. They opened a little bit lower, and then some of the senior paper closed a little bit higher." He saw Charter's 10¼% notes due 2010 ending at 96. He saw Charter's '11s which had "drifted down" to 76 Monday, closing unchanged Tuesday at 76 bid, 77 offered.

Another trader saw Charter's 8 3/8% notes due 2014 up 1 point at 95.5, while its 10% notes due 2014 were unchanged at 52.5.

Another market source saw the company's CCH1 11% notes due 2015 down ½ point at 77.

Charter said that it lost $276 million in the second quarter versus a loss of $360 million a year earlier. Its revenues grew to $1.6 billion, up from $1.5 billion a year ago.

The company posted $591 million of pro forma adjusted EBITDA for the second quarter, representing a 10.1% pro forma increase from the year-ago quarter.

Charter also said that it gained 98,900 new customers during the quarter, bringing the total to 12.2 million.

On its conference call following the release of the results, Charter executives said that the company has reduced its outstanding balance of CCH II senior notes to $1.9 billion through a second-quarter private exchange offer, but continues to project that cash flows from operating activities and available borrowing capacity will not be sufficient to meet the its needs in 2010 (see related story elsewhere in this issue).

Idearc bonds bounce a little...

Elsewhere, traders saw Idearc's 8% notes due 2016 a little better after the notes had fallen below the psychologically potent 40 bid mark in Monday's session.

"They rallied back a little, to 41," one trader said. Another market source also saw the bonds at that same level, calling them a point stronger on the day.

Idearc's bonds had started cascading downward around a week ago when it reported poor quarterly numbers. The bonds initially fell to around the 50 mark from prior levels at 62, and got kicked around at those lower levels. They proceeded to fall another 10 points over several days, and topped that off Monday with intraday falls to the 39 area.

...as do WCI Communities'

Another credit seen coming up from its lows was Bonita Springs, Fla.-based homebuilder WCI Communities, whose bonds slid from the upper 30s down to the lower 30s on Monday following its Chapter 11 filing.

A trader saw its 9 1/8% notes due 2012 up 1 point at 32, while its other bond issues, like the 7 5/8% notes due 2013 and the 6 5/8% notes due 2015, had moved up to 30 "across the board" from Monday's levels at 29 bid, 31 offered.

Another trader saw the 9 1/8s up a point at 31 bid, 33 offered. .

After falling about 9 points on Monday, "they gained just a little back today," he said.

On Monday, WCI announced that it and approximately 130 of its wholly-owned subsidiaries had filed voluntary petitions with the U.S. Bankruptcy Court in Wilmington, Del, seeking to restructure their debt and capital. It claimed debt of $1.9 billion and assets of $2.2 billion as of June 30.

Autos better on no real news

In the autosphere, a trader said that General Motors' benchmark 8 3/8% bonds due 2033 were up ½ point at 48 bid, 49 offered, while another saw those bonds up a point at 47. A market source at another desk saw those bonds as high as 49 and change, up more than 2 points on the day in busy trading.

Among GM's other issues, a trader saw its 7.20% notes due 2011 up 2 points to 60 bid, 60.5 offered, although at another desk, they were seen up more than 1 point at about the mid-59 level. GM's 7 1/8% notes due 2013 were up more than a point to 52.

A trader saw the 7.45% bonds of GM's domestic arch-rival, Ford, up 1 point at 49 bid, 50 offered. Another saw the bonds up 1½ points at above the 50 mark.

GM's GMAC LLC financing arm's 8% bonds due 2031 were up 1 point to 55. Ford Motor Credit Co.'s 5.80% notes due 2009 gained more than 2 points to end just under 97.

In the bank debt market, GM, Ford and Chrysler Financial all saw an improvement in their trading levels on Tuesday as the cash market in general had a positive tone to it, according to a trader.

Detroit-based GM, the world's largest vehicle maker, saw its term loan quoted at 74¾ bid, 75¾ offered, up from 74½ bid, 75½ offered, the trader said.

Dearborn, Mich.-based Ford, long the second-biggest U.S. auto seller but now reduced to Number Three behind GM and Toyota, saw its term loan quoted at 77 bid, 78 offered, up from 76½ bid, 77½ offered, the trader continued.

And, Chrysler Financial, a provider of automotive financial products and services, saw its first-lien term loan quoted at 80 3/8 bid, 81 3/8 offered, up from 80 bid, 81 offered, the trader added.

"Autos have been hit pretty hard, so they found some strength," the trader remarked. "Overall cash market felt firm. We've had a decent slide on relatively light volume. Found some support today."

Georgia Gulf seeks to amend or refinance agreement

Also in the bank loan market, Georgia Gulf Corp. is looking to make progress on a covenant amendment or refinance its senior credit facility to obtain a structure with greater flexibility, the company said Tuesday.

Covenant requirements in the Atlanta-based chemical manufacturer's credit facility are scheduled to tighten significantly through the first quarter of 2010 (see related story elsewhere in this issue)

Meanwhile, Georgia Gulf's 9½% notes due 2014 were seen continuing to languish around the same 75 bid level to which they fell on Monday.

Six Flags still flying

Six Flags Inc.'s bonds were seen higher, several traders said, as the company's bonds continued to climb on the heels of their 3 to 4 point gains on Monday, when the bonds, and the company's shares, rose smartly on unexpectedly good earnings numbers - a swing back to the black versus a year-earlier loss.

A trader said that there was "a bunch of activity today in them." He saw the 9 5/8% notes due 2014 trading in a 54-55 context, up from Monday's closing levels in the mid-52s, "so that's better again."

At another shop, a trader said the New York-based theme park operator's 9¾% notes due 2013 were up about 2 points at 56.5 bid, 58.5 offered. "The numbers really weren't that great," he said - the profit was largely due not to any operational improvements, but due to a debt-for-debt exchange transaction that got nearly $108 million of debt off the books - "but it was good enough to get the bonds up a little, though nothing serious."

Yet another market source pegged those same bonds at 58.5, up some 2½ points on the session, while the 9 5/8s were being quoted at 55, up 2 points.

However, another trader took a contrary view, suggesting that activity in Six Flags "seemed to have subsided a bit. I think initially you started to see that there might have been some bid interest in it - but the offering sides never really filled in where it really traded a bunch."

Gaming names get MGM lift

In the gaming sector, traders saw a number of credits firmer, apparently helped by the rise in MGM Mirage bonds after the Las Vegas-based casino operator put out its latest quarterly numbers and reported that it was making progress in lining up financing for its huge new CityCenter development project.

A trader said Boyd Gaming Corp. "seemed to be a popular name today," calling the Las Vegas-based casino operator's 7¾% notes due 2012 up a point at 86.5 bid, 87.5 offered. Boyd's 6¾% notes due 2014 were among the more actively traded issues, up more than 2 points at about the 77.875 area.

Station Casinos Inc.'s 6% notes due 2012 were seen up more than 2 points to 70 bid, although another market source had the bonds at 68, up only ½ point.

Harrah's Entertainment Inc.'s 5¾% notes due 2017 were seen almost a point better at 44, although its 5 5/8% notes due 2015, also in the 44 neighborhood, were called down 1½ points.

Pinnacle Entertainment Inc.'s 8¼% notes due 2012 edged upward to around 95. Wynn Las Vegas LLC's 6 5/8% notes due 2014 were actively traded around the 90.5 level, up nearly 1½ points.

Calpine, Yankee Candle lower, Claire's better

In the broader distressed market, among the names seen lower was Calpine Corp., with a trader pegging its 8 5/8% notes due 2010 going out at 17.5 bid; at the opening, he saw the San Jose, Calif.-based power producer's bonds open "straddling 20," but then they "got beat up a little bit," and headed for their lower closing levels.

Another downsider, he said was Yankee Candle Co., whose Yankee Acquisition Corp. bonds "continue to get a little lower. He saw the South Deerfield, Mass.-based specialty retailer's 8½% notes at a "70ish" context, while its 9¾% notes eased to 53 bid, 54 offered.

Also among the retailers, a trader saw Claire's Stores Inc.'s 9¼% notes due 2015 trade up 2 points from its Thursday lows, closing at 42. Another said the Pembroke Pines, Fla.-based specialty retailer's 10½% notes were "finally stabilizing" at around 30.

© 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.