GM bonds dip, possibly profit-taking; Ford debt slips on new issue; Six Flags notes end better

By Stephanie N. Rotondo

Portland, Ore., April 6 - Distressed debt ended toward the firm side, traders reported on Tuesday, though there was a fair number of names closing the day unchanged as well.

General Motors Corp.'s bonds were one of the few credits with a downside during the session. One market source speculated that the declines were because of profit-taking ahead of the company's earnings release on Wednesday.

Elsewhere in the automotive arena, Ford Motor Credit Co. LLC released a new issue, which traded up slightly upon its entrance to the marketplace. But as investors sold off other Ford Motor Co. issues to get into the new one, there was some general weakness in the automaker's debt structure.

Six Flags Inc. filed its third plan of reorganization on Tuesday. In reaction, the amusement park operator's debt traded higher.

As a trader had opined on Monday, new issues began to leak into the market again, which helped to bolster volume. Still, sources reported that volumes remained rather thin, but some had hope that things would pick up.

"I think the calendar is just starting to heat up," a trader said.

GM dips

General Motors paper drifted down some as the Detroit-based automaker prepared to release its fourth-quarter results.

One trader said the benchmark 8 3/8% notes due 2033 were "weaker ahead of numbers," quoting them at 36½ bid, 37 offered.

"It's probably some people taking profits," he said of the weakness. The bonds had previously been on a slow but steady upward climb.

Another trader deemed the notes down half a point at 36¾ bid, 37¾ offered.

GM will hold a conference call to discuss the results at 10 a.m. ET on Wednesday.

Also in the autosphere, a trader called Visteon Corp.'s 8¼% notes due 2010 "better" at 99 bid, par offered.

Ford bonds slip on new issue

Ford Motor Credit, the finance division of Ford, launched a $1.75 billion new issue Tuesday, which resulted in some softening in the company's existing debt.

One trader speculated that the weakness was simply investors jockeying for position.

The trader said the new issue - a 7% five-year note priced at 99.478 with a yield of 7 1/8% - was "trading right where it came" to "marginally better" at 99½ bid, 99¾ offered.

"They probably would have liked to see it end up somewhat better," the trader said.

The trader also noted that Ford's other issues were on the active side, with about $40 million to $50 million of the 7¼% notes due 2011 trading at 103 bid, 103½ offered. He placed the 6½% notes due 2018 around 95 and the 8½% notes due 2020 around the 105 mark. The benchmark 7.45% notes due 2031 meantime closed at 94½ bid, 95½ offered, and the 12% notes due 2015 closed around 120, with about "$20-odd million" changing hands.

At another desk, a trader called the 7.45% notes up a half point to 94½ bid, 95½ offered. The trader also quoted the new issue at 99½ bid, par offered.

Six Flags gets a boost

Six Flags' debt ended the day "better," a trader said, as the company filed its third amended reorganization plan.

The trader placed the 9 5/8% notes due 2014 "around 35." Another saw the issue trading at 36 bid, a gain of 4 points on the day.

The filing of the amended plan formalized an agreement inked last month with junior bondholders. Under the terms of the plan, the bondholder group - which is backed by Stark Investments - will receive control of the New York-based amusement park operator upon its emergence from Chapter 11 protections.

The plan calls for the issuance of new debt and an equity infusion from the Stark-led bondholders in order to pay off secured lenders and bondholders who were part of the previous Avenue Capital Group-led plan.

In other Six Flags news, the company has reportedly approached investors of Cedar Fair Entertainment Co. - which operates the Knotts Berry Farm parks - regarding a potential merger. The investors, however, claim such discussions are premature.

Cedar Fair also announced that it would reject a takeover bid from Apollo Management, saying the proposal undervalued the company.

Broad market steady to better

In the rest of the market, Blockbuster Inc.'s 9% notes due 2012 were "a little better," according to a trader, ending around 21.

Another trader said an "unusual amount" of MGM Mirage's 6 5/8% notes due 2015 traded at 83¼ bid, 83½ offered. He deemed that level "probably unchanged" to up slightly.

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