First Data finally firms up, Ford, GM up from early lows, Rite Aid off; Canwest loan launches

By Paul Deckelman and Sara Rosenberg

New York, May 21 - First Data Corp.'s recently hard-hit bonds turned upward on Friday, as the overall junk bonds market seemed to steady after having been whacked lower on Thursday.

Also enjoying a bit of a rebound were the bonds of automotive bellwethers Ford Motor Co. and General Motors Corp., which firmed from the lows at which they began the session.

In another part of the automotive parking lot, Visteon Corp.'s bonds were seen not much moved - except for a few small, unrepresentative trades -- by the news that competitor Johnson Controls Inc. had put in a bid for much of the bankrupt auto parts concern's operations. Company management essentially shrugged off the Johnson offer and said they would press forward with completing Visteon's bankruptcy reorganization.

Rite Aid Corp.'s bonds were down a point or more pretty much across the board, although no fresh news was seen out on the drugstore operator. Fellow retailer Bon-Ton Department Stores Inc.'s bonds remained around the levels to which they had fallen amidst the market downturn Thursday, despite good quarterly numbers.

In the bank debt market, Canadian media company Canwest LP launched its $400 million term loan on Friday. That financing will allow note holders to buy the company from its bankrupt corporate parent, Canwest Global Communications Corp.

First Data finally firmer

First Data Corp. - whose bonds got whacked down by anywhere from 3 to 5 points a week ago when the Greenwood Village, Colo.-based electronic transaction processor released disappointing first-quarter numbers, and then continued to lose ground over the following several sessions - finally showed a little rebound Friday on what one trader called "good volume on all of it," referring to the company's three series of bonds.

He saw its 9 7/8% notes due 2015 finishing the session at 81 bid, which he said was up by ½ point to a full point. The paper had earlier gotten as good as 82.

He also saw a lot of volume in First Data's 10.55% notes due 2015, with the bonds finishing in a 75 to 75½ context, up a point.

First Data's 11¼% notes due 2016 were unchanged in a 66 to 66½ range.

At another desk, a market source called the 10.55s nearly 2 point gainers on the session, seeing them at 751/2.

Another market participant also saw those 10.55s at 751/2, although calling that a 1 point advance, with the 9 7/8s meanwhile up some 2 points-plus on the day at 82¾ bid. More than $19 million of each of the 2015 bonds had changed hands by mid-afternoon - a figure which continued to swell heading for the close - making First Data one of the most actively traded credits on the day.

Ford, GM come off early lows

A trader said that Ford Motor's 7.45% bonds due 2031 started the session at 84 bid, 86 offered, and finished up at 86 bid, 87 offered, which he called up a point or two.

He also saw General Motors' benchmark 8 3/8% bonds due 2033 trading in a 30-32 context most of the day before ending at 32, which he called unchanged, "so they got down to 30, and they're ending at 32."

He said there was "really good volume on GM, it was an active name today."

Another trader said that the GM benchmarks closed down ¼ point on the day at 32 bid, 33 offered, while seeing the Ford long bonds unchanged on the day at 86 bid, 88 offered.

However, a market source at another shop pegged the GM benchmark issue down by more than full point Friday at a shade over 31, while seeing the Ford '31s going out just under 86, calling that up around a point on the day.

Johnson jolts Visteon with offer

Also in the automotive arena, the news that Johnson Controls had made a surprise bid for most of the assets of Visteon Corp. did not have much of an impact on the bankrupt Van Buren Township, Mich.-based components supplier's bonds - but did seem to annoy Visteon management..

Visteon's 7% notes due 2014 were seen unchanged at 106 bid , while its 8¼% bonds due Aug. 1 traded most of the day around 108, down several points from the levels in the 110-112 area seen on Thursday, before nosediving late in the day to around 101 bid, although a market source cautioned that all of the day's trades were smallish odd-lot transactions -- and the final deals of the day that sent the bonds plunging were particularly small, with "not even 10 bonds [i.e. $10,000] traded," and thus, representative of nothing.

Visteon, currently wending its way through Chapter 11 with a case before the federal bankruptcy court in Wilmington, Del., did not seem terribly impressed with Milwaukee-based Johnson Controls' $1.25 billion offer for its interiors and electronics business, brushing off the bid in a news release as "highly conditional and vaguely defined,." saying it lacks important information.

Visteon even raised the possibility that a sinister ulterior motive may be behind the suddenly appearing offer. It said that by making an offer so late in Visteon's bankruptcy proceedings and "at a critical point in our Chapter 11 process" - a hearing on the company's disclosure statement is scheduled for Monday - Johnson, a "direct competitor" of Visteon, "stands to benefit by introducing delay and complexity" into its rival's reorganization efforts.

Visteon further said that its past dealings with Johnson have been "extensive and difficult, and said that right now, its focus is on quickly wrapping up the bankruptcy proceedings (see related story elsewhere in this issue)."

CIT moves up

A trader said that CIT Group Inc.'s bonds had recently been on "a wild ride," that extended into "today as well." He said prices on the New York-based commercial lender's bonds were moving around, although "they were not very active today" volume-wise.

He saw the company's 7% notes due 2014 up a point on the day at 92 bid, with its shortest issue, the 7% notes due 2013, about a point better than that, and its longest issue, the 7% notes due 2017 up by ½ point at 89.

He said there was "not a lot of trading in the '13s, there was more trading in the long ones."

Also among the financials, there was a fair amount of activity in Lehman Brothers Holdings' bonds, such as its 5 5/8% notes due 2013, which closed the session 21¼ bid, down slightly on the day.

Bon-Ton seen steady, Rite Aid retreats

A trader said that Bon-Ton Department Stores' 10¼% senior notes due 2014 were steady at around a 97-97 3/8 context, about the level to which the York, Pa.-based retailer 's bonds had fallen on Thursday, when they lost 2 to 2½ points, despite the company having registered decent fiscal first-quarter results..

"Yesterday [Thursday] everything was down," he opined, "so it didn't matter."

"There were not a lot of trades," he said, adding that "97 was where they hung out most of the day."

On Thursday., Bon-Ton announced that its fiscal first-quarter loss had narrowed on a mix of higher sales and lower costs and it raised its guidance for the year.

It lost $23.5 million, or $1.33 per share, for the period ended May 1, which compared with a loss of $45.4 million, or $2.67 per share, a year earlier. Revenue, mostly from sales, rose 2% to $675.2 million from $662.9 million.

Same-store sales rose 3% in the quarter, while cost of sales fell 1% to $414.3 million and selling, general and administrative expenses fell 4% to $227.9 million.

The retailer guided that it now expects full-year net income between 80 cents and $1.60 per share, up from prior guidance of 30 cents to $1.10 per share. Analysts expect net income of $1.40 per share.

Elsewhere in retail, a trader saw Rite Aid's several series of bonds mostly lower, with the Camp Hill, Pa.-based Number-Three U.S. drugstore chain operator's 6 7/8% notes due 2013 at 88 bid and its 6 7/8% bonds due 2028 at 55, both down a point on the day.

The company's 7½% notes due 2017 were down 1¼ points on the day at 89 bid, while its 7.70% paper due 2027 ended down 2½ points on the day at 58½ bid. Rite Aid's 8 5/8% notes due 2015 bucked the trend, rising ½ point to 80 bid.

Canwest buyout loan launches

Bank-loan traders meantime said Canwest LP launched its $400 million term loan on Friday with talk of Libor plus 600 bps with a 2% Libor floor, an original issue discount of 98 and 101 call protection for one year, according to sources.

JPMorgan and Morgan Stanley are the lead banks on the deal that will be used to help fund the acquisition of the company and some of its subsidiaries by holders of its 9¼% senior subordinated notes.

The noteholder group has agreed to buy substantially all of the LP entities' financial and operating assets from Canwest Global Communications Corp., including all of its daily newspapers, digital and online media operations as well as the shares of National Post Inc., for $1.1 billion, including $950 million in cash funding.

Canwest Global is a Winnipeg, Man.-based media company that filed for Chapter 15 bankruptcy on Oct. 6, 2009.

-Rebecca Melvin contributed to this report

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.