NXP paper helped by sale of JV stake; Merisant Worldwide bonds quiet; Delphi's bonds find a bottom

By Stephanie N. Rotondo

Portland, Ore., Aug. 20 - NXP Semiconductors' bonds got a boost Wednesday on the news that it will unload its stake in its joint venture with STMicroelectronics.

NXP owns 20% of ST-NXP Wireless, a joint venture that was formally created in July and recently began operations. But STMicroelectronics plans to buy NXP's share as it looks to combine the joint venture with Ericsson's Mobile Platforms unit. Investors seemed pleased by the news, pushing the bonds up at least 2 points.

Meanwhile, Merisant Worldwide Inc. held a conference call to discuss its second-quarter results Wednesday. The numbers included a drop in operating EBITDA and cash on hand. However, the company remained optimistic and said it plans to go forward with its new product plans. The sweetener maker's debt remained on the quiet side during the session.

As Delphi Corp. struggles to exit bankruptcy, its bonds have seemingly found their bottom. Even news that the company plans to layoff 6% of its salaried employees did little to cause some movement in the debt.

"Delphi has been kind of quiet recently," a trader said.

Stake sale boosts NXP

NXP's bonds gained momentum during Wednesday trading after it said it would sell its stake in its ST-NXP Wireless joint venture.

A trader called the 9½% notes due 2015 up 2 points at 67 bid, 68 offered.

NXP will sell its 20% stake in the joint venture with STMicroelectronics. The sale is part of a new deal where ST-NXP will join with Ericsson,

The new company will combine Ericsson's Mobile Platforms unit with the joint venture formed in July. The combination of the companies will aim to challenge the current leaders of the wireless chip world, including Qualcomm and Texas Instruments.

ST-NXP was formally created in July, with the deal first being announced in April. The new company began operations Aug. 2. STMicroelectronics took an 80% stake in the JV, giving NXP $1.55 billion for the transaction.

NXP is a Netherlands-based wireless chipmaker.

Merisant cash, EBITDA drops

Merisant's debt remained on the quiet side as the company held a conference call to discuss its second-quarter results.

A trader said he saw the 9½% notes due 2013 offered at 72, adding, "That has been out there for awhile." He also saw the 0% discount notes due 2014 at 17 bid, 19 offered.

During its conference call, Merisant management said that while cash on hand and operating EBITDA had declined, they remained positive about its ability to move forward.

"We remain optimistic that we will optimize our structure despite the difficult economic environment," said Paul Block, chief executive of Merisant.

Cash and cash equivalents fell to just over $12 million for the quarter, down from more than $50 million in December 2007. Operating EBITDA fell to $15.5 million from $22.1 million the year before. The company said the drop in EBITDA was largely due to a decline in North American sales. Total net sales came in at $67.07 million, with a 14% decline from the North American region.

Merisant is also planning to launch a new product called PureVia, an all-natural tabletop sweetener.

"The introduction of PureVia will strengthen this portfolio considerably," Block said.

Merisant is a Chicago-based marketer of low-calorie tabletop sweeteners, including Equal.

Delphi holding its own

Despite the recent news of a hefty layoff, Delphi's bonds have held their ground.

One trader generically placed the bonds at 11.5 bid, 12.5 offered.

"That's about where they have been for like a week," he said.

Another trader said there was "a little bit of trading, but kind of where it's been" at 12 bid, 13 offered.

On Monday, the struggling auto parts supplier said it would cut 600 salaried jobs in its electronics and safety division, representing a 6% cut of its salaried workers.

The layoffs come as the company continues to try to emerge from Chapter 11 protections, where it has been since October 2005.

Among other auto parts suppliers, Visteon Corp.'s 7% notes due 2014 fell 2.5 points to 50 bid.

Another trader called the bonds unchanged to "maybe down a point," with the 7% notes at 49 bid, 50 offered and the 8¼% notes due 2010 at 84 bid, 86 offered. There was "some trading in it, but not a whole lot," he said. He noted the lack of activity in the credit - despite news of Visteon's amended agreement with former parent Ford Motor Co. - saying that "there were just one or two trades."

At another desk, a market source saw the 7% notes at 49 bid, calling them down about a point on the session, and down nearly 2 points from the last previous round-lot trade last week.

Meanwhile, Delphi's former parent, General Motors Corp., saw its term loan lose some ground, with market technicals being blamed for the movement, according to a trader.

The term loan was quoted at 73 5/8 bid, 74¾ offered, down from Tuesday's levels of 73¾ bid, 74 7/8 offered, the trader said.

A bond trader said GM's benchmark 8 3/8% notes due 2033 also closed weaker at 50 bid, 51 offered.

Broad market weak

R.H. Donnelley's paper was up at least half a point, a trader said, although Idearc Inc.'s bonds "don't seem to be up."

The trader quoted R.H. Donnelley's 8 7/8% notes due 2016 at 46.5 bid, 47.5 offered, up a point from 45.5 bid, 46.5 offered previously. Idearc's 8% notes due 2016 were "still right around 43."

Bon-Ton Stores Inc.'s 10¼% notes due 2014 were "weaker ahead of their numbers," a trader said. He pegged the issue at around 48. The quarterly figures are due out Thursday.

"It did seem like retailers in general were a bit softer," he added. He also saw Claire's Stores Inc.'s 9¼% notes due 2015 at 41.5.

United Rentals' bonds lost half a point during the session, with its 6½% notes due 2012 at 89 and its 7¾% notes due 2013 at 79.

In casinos, Harrah's Entertainment LLC's 10¾% notes due 2016 dipped a point to around 69.

Charter Communications Inc.'s 11% notes due 2015 were seen down a point at 77.

Sara Rosenberg and Paul Deckelman contributed to this article.

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