MGM notes up and down; Smurfit holds its ground; Ford mixed on new add-on; broad market mixed

By Stephanie N. Rotondo

Portland, Ore., Jan. 14 - The distressed debt market was overshadowed by a glut of new issues Thursday, according to market sources.

"There were lots of new issues. That was definitely what was busiest," a trader said. While "a lot of them ended right where they came," turnover in that arena was rather high.

But that created some frustration for distressed traders.

"The market just sucks," said one disgruntled trader. "It just won't go."

The second trader added that things were 'still bid for," but that it was "hard to get anything done."

What was getting done was some trading in MGM Mirage's debt. The bonds were up or down, depending on the issue - and to whom you talked to. With no news out, one source speculated the action was simply due to investors jockeying for position.

Meanwhile, Smurfit-Stone Container Corp. held its ground during the day's session, in "semi-active" trading.

On the topic of new issues, Ford Motor Co. priced an add-on Thursday. The issue being added onto subsequently traded lower on the day, though Ford was deemed the overall biggest traded name of the day.

MGM notes up and down

MGM Mirage's bonds were mixed on the day, according to market sources.

A trader said a "big hunk" of the Las Vegas-based casino operator's debt had turned over, pegging the 8 3/8% notes due 2011 "up a little bit" at 99 bid, 99.5 offered. However, the 6 3/8% notes due 2012 drifted lower, he said, to around 96.5.

"I think it's somebody selling the 12s and buying the 11s," he said.

Another trader said the bonds were active, seeing the 6¾% notes due 2012 around 99, while another placed the 6 5/8% notes due 2015 up a point at 88 bid.

Earlier in the week, Goldman Sachs upgraded the company's stock. Also, Nevada posted November revenues, which showed an 8.3% improvement year-over-year. Over half the revenue earned during the month came from the Las Vegas Strip.

It was the first time in nearly two years that the gambling Mecca recorded improved numbers.

Smurfit paper holds its ground

Smurfit-Stone Container's debt was "semi-active," a trader said, as news came out regarding the company's Chapter 11 case.

The trader called the bonds unchanged, seeing the 8 3/8% notes due 2012 at 89.5.

Another market player also deemed the debt steady, quoting the 8¼% notes due 2012 and the 8% notes due 2017 at 89 bid, 90 offered.

On Thursday, the bankruptcy court overseeing the Chicago-based company's case approved a request for a four-month exclusivity extension.

And, on Wednesday, Reuters reported that a group of shareholders were planning on waging war against the company's bankruptcy plan. The issue seems to be Smurfit's failure to have its business appraised.

Smurfit-Stone Container is a manufacturer of paperboard packaging.

Ford mixed on new add-on

Ford Motor was on the day's most active list and was dubbed the day's most active credit overall.

A trader said about $200 million of Ford's various issues traded, "all within a quarter-point" from Wednesday.

The trader saw about $20 million of the 7½% notes due 2012 change hands around 102. The 8.70% notes due 2014 ended around 105, also on about $20 million traded.

Another trader said the 8 1/8% notes due 2020 "looked like the most active bond," as the company priced a $500 million add-on to the issue. He called the paper about a point lower at par bid, 101 offered, compared with 101 bid, 102 offered previously.

The new add-on was priced at par on Thursday.

Also in the autosphere, Visteon Corp.'s 7% notes due 2014 gave back some of the gains it had incurred recently, according to a trader. He saw the bonds opening around 48, only to close lower around 46, down about 3 points on the day.

Another trader saw Cooper-Standard Automotive's 8 3/8% notes due 2014 at around 38 bid, which he said was "about where they were" previously.

He also saw Visteon's 7% notes "down a couple of points" at 46.5 bid, on " decent volume trading." He said the bonds had traded around a 48 to 48.5 context previously, such as on Wednesday, and on Thursday, they spent "most of the day hanging around 48, but then at the end of the day, they just tailed off to 461/2."

Broad market unchanged

Elsewhere in the distressed debt realm, Energy Future Holdings Corp.'s 11¼% notes due 2017 closed at 75 bid, 76 offered.

"I don't think that's much different," a trader said.

Another trader said that he would call CIT Group Inc.'s five series of notes maturing between 2013 and 2017 unchanged on the day. He saw the New York-based commercial lender's 7% notes due 2013 trading between 93 and 94, and its 2017 notes around 88 bid, 89 offered, with the in-between bonds quoted around 90 bid, 91 offered. Those levels were "just about where they've been" of late.

R.H. Donnelley Corp.'s subordinated holdco paper, like its 8 7/8% notes due 2017 or 2018, and its 6 7/8% notes due 2013, were trading around 12, while its Dex Media subsidiary's bonds, like the 9% notes due 2013 and 8% notes due 2013 around 35, while the Dex premium paper, like its 8½% notes coming due on Aug. 15, were at 134, "about where they were [Wednesday], so I'm not seeing a whole lot of change in it," a trader said.

He said that maybe the 8% notes due 2013 were maybe "quoted a point lower, but [it was] no big deal. I don't see much activity in that issue."

Paul Deckelman contributed to this article.

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