Visteon upside ride continues; Ford firms on solid sales; MBIA sharply higher on Q4 numbers

By Paul Deckelman and Sara Rosenberg

New York, March 2 - Visteon Corp.'s bonds continued to climb for a third straight session, their surge fueled by the release late last week of favorable fourth-quarter and fiscal 2009 results, as well as investor sentiment that maybe a nascent turnaround in the fortunes of the automakers also bodes well for the bankrupt Van Buren Township, Mich.-based automotive components company, which sells most of its product to former corporate parent Ford Motor Co. and other large automakers.

Ford's bonds, meantime, were seen mostly better after the Dearborn, Mich.-based automotive giant posted sharply higher February sales numbers versus a year ago, even actually edging out larger domestic arch-rival General Motors Corp. in the number of cars sold in the United States last month - the first time that's happened in almost a dozen years. GM's bonds, on the other hand, were not much moved, even though GM also showed a year-over-year gain in February sales; the U.S. carmakers were helped not only by better economic conditions versus a year ago, but also by the recent recall troubles of their joint Japanese nemesis, Toyota.

Apart from the auto names, Lyondell Chemical Co.'s bonds were quoted better, but with not much trading activity seen, amid news reports that the board of bankrupt parent LyondellBsell AF had rejected the latest takeover offer from India's Reliance Industries - which could decide to look elsewhere to satisfy its yen for acquisitions.

MBIA moves on numbers

MBIA Inc.'s surplus notes were quoted up more than 10 points after the Armonk, N.Y.-based bond insurer posted a sharply narrowed fourth-quarter loss versus a year ago, and actually swung into the black on a full-year basis in 2009, versus its multi-billion-dollar loss in 2008.

A trader saw MBIA's 14% surplus notes due 2033 at the 60 bid level, which he called up 10 or 12 points from their prior levels.

The company reported after the close of trading on Monday that during the fourth quarter it lost $242 million, or $1.16 per share - less than one quarter of the red ink totaling $1.2 billion, or $5.21 per share, a year earlier, although the per-share loss did come in slightly above average Wall Street expectations in the $1.10-$1.11 per share range. Fourth-quarter revenue was $652.7 million versus a year-ago loss of $1.59 billion, although that huge loss was chiefly attributable to a $1.67 billion deficit on insured derivatives.

For the full year, MBIA was back in the black, with earnings of $623.2 million, or $2.99 per share, versus a loss of $2.7 billion, or $12.11 per share in 2008.

Visteon very strong, once again

A trader saw Visteon's 7% notes due 2014 trading at 89 5/8 bid, which he called a 6 point gain on the session, while its 8¼% notes due 2010 were "actually trading right on top of it" at 89, which he called up 7 points, "again," referencing the similarly sized gain seen in Monday's dealings. He said that the 7s "had more action than the 81/4s," with "not much action, only a couple of trades that I could see" in the latter bonds.

At another shop, a trader called the 7s up 10 to 12 points on the day to around 90 bid, on "decent volume."

He saw the company's 8¼% notes due 2010 up 8 points on the day in the high 80s, but he agreed with the first trader that there was not as much trading in it as in the 7s.

Visteon's bonds have risen nearly 40 points in three days - from the lower 50s to around 90 - in the wake of solid quarterly numbers. Visteon late Thursday reported fourth-quarter sales of $2.03 billion, up from $1.65 billion the year before. Net income came to $276 million, or $2.12 per share - an improvement over the net loss of $346 million, or $2.67 per share, for the fourth quarter of 2008.

For the year, Visteon - spun off from Ford Motor Co. a decade ago - reported its first-ever yearly profit, with net income coming to $128 million, or 98 cents per share, on sales of $6.68 billion. In 2008, the Van Buren Township, Mich.-based auto components company reported a full-year loss of $681 million, or $5.26 per share, on sales of $9.54 billion.

Ford firms on sales surge

Also in the automotive parking lot, a trader said that Ford's 7.45% bonds due 2031 were up by 2 points at 89½ bid, 90½ offered, apparently helped by strong February sales numbers.

A second trader said that the 7.45s were around 90 bid, "up a couple of points, on not a lot of trading, but it's feeling better." He had the same assessment of the company's shorter paper.

However, another trader, while saying that Ford's 8.70% notes due 2014 was "one of the more active issues," saw them trading at 102½ bid. He said that "if anything, it's probably down a little, maybe off a half" versus its Monday close. He opined that the Number-Two U.S. car manufacturer "was expecting better sales, even though the sales numbers weren't bad."

Ford had posted a 43% year-over-year sales gain in February -- and actually sold 334 more vehicles in the United States during the month than chief competitor General Motors did, the first time that has happened since August 1998, when GM was hobbled by a strike. Ford sold 142,006 cars and light trucks, including its popular F-series pickup trucks, its Fusion sedan and Escape SUV.

Sales of Ford cars alone, absent other types of vehicles such as light trucks, were a sizzling 54% better than its admittedly weak year-earlier numbers. Ford cited strong customer demand for its fuel-efficient cars like the Fusion hybrid model, as well as strong fleet sales to rental-car companies and other commercial and construction fleet customers. Ford's share of the U.S. car market climbed to 17.5%, versus around 14% a year ago.

GM steady even on better sales

A trader saw General Motors Corp.'s benchmark 8 3/8% bonds due 2033 down ½ point at 31½ bid, 32½ offered, even though the Detroit giant had posted a 12% sales gain in February versus a year earlier.

However, at another desk, a trader took a more sanguine view, seeing GM "feeling better," with the long bonds getting as high as a 32-33¼ range before going home around the latter level, "probably up a point." He said there had been "decent trading in the credit."

A trader meantime said that he "didn't see a whole lot of action" in GM, although he did see some activity in GMAC LLC, with the Detroit-based automotive and (through its Residential Capital LLC division) mortgage lender's 6 7/8% notes due 2012 trading at 991/2, which he called unchanged, with almost $10 million of the bonds having changed hands.

Lyondell little moved on Reliance stories

A trader saw "a couple of trades" in Lyondell's 7.55% bonds due 2026 at 821/2, up a point, but he only saw one sizable trade in Lyondell's 10¼% notes due 2010, which he saw at 83¼ bid, up a point.

"The bonds are up a point," he said, "but in not a lot of action."

Another trader called the Houston-based chemical company's 101/4s "up a couple of points" at 83-831/4, "but on not many trades." He saw just one trade in the 9.80% notes due 2020, at the 82½ level, while the 7.55s were "a little more active, but not much," trading a point better at 82½ bid.

The bonds were relatively little traded in the wake of news stories indicating that parent LyondellBasell's board had voted against a revised takeover offer from Indian energy operator Reliance Industries, which had offered about $14.5 billion for the company. There had been no confirmation of the stories from either Reliance or Lyondell as of press time Tuesday evening.

Rouse rises ahead of hearing

A trader said that he "saw some action" on Rouse Corp.'s 5 3/8% notes due 2013, which he said was one of the more active junk issues Tuesday. He pegged the bonds at 108 bid, up 1½ points on the session, while also seeing "a few trades" in its 7.20% notes due 2012 , which he said was also up around 1½ points to 114¼ bid.

Another trader saw the company's 8% notes that were to have come due in April 2009 unchanged to up a point in a 100-111 context, on "some volume."

Lawyers for Rouse corporate parent General Growth Properties Inc. and a would-be buyer of the bankrupt Chicago-based shopping mall owner, Simon Property Group Inc., are to square off on Wednesday at the U.S. Bankruptcy Court in Manhattan, where a judge will hear General Growth's request for a six-month extension of its exclusive right to file a reorganization plan -- a step opposed by Simon, which has made a $10 billion offer to buy General Growth out of bankruptcy, and by General Growth's own unsecured creditors committee, which has endorsed the Simon proposal.

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