Nuveen slips despite positive call; Ford Motor mixed, TRW better; Swift lower on profit-taking

By Stephanie N. Rotondo and Sara Rosenberg

Portland, Ore., June 29 - The distressed debt market ended the first trading session of the week unchanged to a tad better, traders reported, though activity overall was light.

"A lot of guys are out," one trader explained, noting that month-end, quarter-end and the shortened holiday week likely meant little notable would happen. "[Tuesday] and Wednesday are the only two days you'll have [to get things done]."

"Unless there is something on the tape that is notable, I don't expect a lot," said another trader.

Of what was trading Monday, "it was all plain vanilla," the first trader said.

Nuveen Investments Inc. was one of the more topical names of the day, as the company held a conference call to update investors regarding its financial position. But despite positive comments from management, the bonds were seen heading lower.

Meanwhile, Ford Motor Co.'s debt closed mixed. The automaker issued its June sales forecast at a briefing at its corporate headquarters, which are expected to be better than its competitors.

Also, TRW Automotive's bonds improved, following an equity upgrade by a JPMorgan & Chase Co. analyst. The analyst called TRW a "survivor" in the automotive industry.

Profit-taking was blamed for declines in Swift Transportation Co. Inc.'s term loan debt. The debt had previously rallied on chatter that the company had drawn down its revolving credit facility.

Nuveen slips despite positive call

Nuveen Investments held a conference call to update its investors on its financial position. But despite positive comments from management, the company's bonds ended Monday's session slightly lower.

One trader saw the 10½% notes due 2015 at 67 bid, 69 offered and the 5% notes due 2010 at 92 bid, 94 offered. However, he noted that he saw "no markets after [the call]."

Another market source placed the 5½% notes due 2015 at 49 bid, 50 offered, down a point.

During the call, Glenn Richter, Nuveen's chief operating officer, said that business has improved in the second quarter.

"We have seen the fundamentals of our business strengthen across many fronts," Richter said.

To that end, the company expects to have $128 billion in managed assets by the end of the quarter, an 11% improvement over the first quarter of 2009.

Elsewhere in the financial arena, First Data Corp.'s term loan B debt gained some ground in the secondary market following news that it has entered into an alliance with Bank of America, according to traders.

One trader quoted the term loan B debt at 74¾ bid, 75¾ offered, up from 73¼ bid, 74¼ offered. A second trader only saw levels on the term loan B-1 and he placed that tranche at 74¼ bid, 75¼ offered, up from 72¾ bid on Friday.

On Monday morning, First Data revealed that it and Bank of America are forming a new company named Banc of America Merchant Services LLC, which will provide clients with a suite of innovative payments solutions including credit, debit and prepaid cards to merchant loyalty, check and eCommerce payments.

Bank of America will contribute approximately 240,000 merchant relationships and First Data will contribute approximately 140,000 merchant relationships to the new company.

The company will be approximately 46.5% owned by Bank of America and 48.5% by First Data, with the remaining stake held by Rockmount Investments LLC, an investment vehicle controlled by a third party investor.

First Data is a Greenwood Village, Colo.-based provider of electronic commerce and payment services.

Ford mixed, TRW better

Ford Motor's bonds closed the day mixed after the Detroit automaker forecast a smaller sales decline for June.

A trader called the 8% notes due 2016 "up a couple points" at 76.5 bid, 77.5 offered. He also saw the 7 3/8% notes due 2009 around 99 3/8, "but that's just where they trade; those things never move."

The trader also noted that trading was thin in the name.

Another trader quoted the benchmark 7.45% notes due 2031 at 55 bid, 56 offered, down half a point.

In a briefing at its Dearborn, Mich., headquarters, a Ford spokesperson said that the company expects to post a 10% to 15% decline in sales from 2008 figures. May sales were down 24% year-over-year and the first five months saw a 37% decline.

Ford also said that its forecast numbers are expected to be below other carmakers.

"The worst is behind us," said George Pipas, a Ford sales analyst, at the briefing. "We may see economic growth in the second half and a higher level of auto sales."

Among other names in the autosphere, TRW Automotive's bonds were "a couple points better on the bid side," a trader said. He saw the 7% notes due 2014 at 69 bid and the 7¼% notes due 2017 at 66 bid. He noted that there were no offers.

"I don't think they are around anymore," he said of the notes. "I've just seen bids the last couple days."

The gain in the bonds came after a JPMorgan Chase & Co. analyst raised his rating on the automotive parts supplier's equity to overweight from neutral. The analyst cited a recent amendment secured from lenders regarding TRW's $2.5 billion senior secured credit facility.

"We had expected TRW to reach an amendment for its credit facility announced Friday, but the outcome was better than expected," the analyst said in a note to clients. He added that the new terms made "TRW a clear survivor, in our view."

Also, Lear Corp.'s 5¾% notes due 2014 saw "a decent amount of trading," a trader said, as the company reportedly prepares for a bankruptcy filing.

The trader said the notes ended around 25, up from 24 last week. Another source pegged the issue at 26 bid, up a point.

Lear is expected to file for Chapter 11 protections by July 1.

Swift loan lower

Swift Transportation's term loan B came in a little in trading as there was probably some profit-taking following Friday's rally, according to traders.

The term loan B was quoted by one trader at 74 bid, 75½ offered, down from 74½ bid, 76½ offered, and by a second trader at 74 3/8 bid, 75 3/8 offered, down from 74¾ bid, 76¼ offered.

On Friday, the term loan B moved up from 69¼ bid, 70¼ offered, after talk surfaced that the company borrowed all the remaining funds under its revolving credit facility.

One trader explained that revolver draw created speculation that the company was borrowing the money now because it might be facing covenant issues, which would likely result in an amendment attempt and higher loan pricing, and as a result, the term loan B moved up on the news.

Another possible reason for the Friday rally was a rumor that the company could potentially be doing a bond deal that would be used to pay down bank debt.

Swift Transportation is a Phoenix-based truckload carrier.

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