GM bonds up on AmeriCredit news; U.S. Concrete signs put deal; Energy Future busier, unchanged

By Stephanie N. Rotondo

Portland, Ore., July 22 - "Everything was just up," a trader said of the distressed debt arena on Thursday.

He estimated that the positive trend resulted in half-point to 2-point gains on average, depending on the credit. He added that a "dearth" of paper was likely part of the recent increases.

Still, a trader said a bout of new issues was what was driving the market - and taking up the bulk of trading.

"All new issue stuff obviously just flew," he said. "Everyone is trying to get their hands on assets now."

General Motors Corp. was an active name during Thursday session. While trading in the automaker's bonds tends to be in decent size on a normal day, news that the company was buying AmeriCredit Corp. at least doubled the total volume and gave the bonds 1 to 2 points of upside.

Elsewhere, U.S. Concrete Inc.'s debt moved up just slightly, but in round-lot trading, a trader said. The company announced that it had signed an agreement to buy back $50 million of its convertible debt.

And, Energy Future Holdings Corp. continued to be active, but remained at levels seen in the prior session. One trader speculated that the variance in trading volume over the week was partially because of competing opinions on a recently announce debt swap.

GM up on AmeriCredit news

General Motors' bonds headed for higher ground following news announcing the formerly bankrupt automaker was buying subprime lender AmeriCredit Corp.

One trader called the benchmark 8 3/8% notes due 2033 up a point at 34 bid, 34½ offered.

Another trader echoed that market, stating that the issue was "one of the real active ones," with $100 million to $150 million of the bonds changing hands.

Yet another source deemed the debt up 1½ to 2 points, placing the paper around 34.

GM said it will pay $3.5 billion - or $24.50 per share - for AmeriCredit in an all-cash transaction. In a press release announcing the purchase, GM remarked that the buy was an effort to "meet customer demand for leasing and non-prime financing for GM vehicles."

The Detroit-based company had previously been considering buying back its former financing arm, GMAC LLC, or starting another unit in order to have in-house financing options.

"With AmeriCredit providing us niche capabilities in leasing and non-prime financing, along with the continued strong support of Ally Financial and others for prime retail and dealer financing, we've set up a very competitive solution for our financing needs, which will be resilient through credit and business cycles," said Chris Liddell, vice chairman and chief financial officer, in the release.

The acquisition is expected to close by the end of the fourth quarter.

U.S. Concrete signs put deal

A trader said U.S. Concrete's 8 3/8% notes due 2014 were trading in a 491/2-50 context, after the company announced a deal in which it would buy $50 million of its outstanding 9½% five-year convertible notes.

"They had been trading around 49 in odd-lots," he said. "Today was the first time I've seen them trade in round-lots, I think it's up a little bit."

Another trader saw the bonds "up and down" around 49 bid, 50 offered, "kind of right where it has been."

The Houston-based cement producer said in a regulatory filing that it had inked the deal with Monarch Alternative Capital, LP, Whitebox Advisors, LLC and York Capital Management Global Advisors, LLC.

Holders of the 8 3/8% notes will also have the option of purchasing the convertible notes. If bondholders participate, that would lessen the amount U.S. Concrete has to fork over.

Any proceeds would be used to repay the company's debtor-in-possession loan and for general corporate and working capital purposes.

TXU busier, but unchanged

Energy Future's notes remained unchanged on the day, though a trader claimed trading in the credit was "a bit busier."

He said the 10 7/8% notes due 2017 and the 11¼%/12% senior toggle notes due 2017 were the most active issues, with about $75 million of the company's assorted bonds turning over.

The trader pegged the 10 7/8% notes at 75 bid, 75½ offered and the toggle notes at 67 bid, 67½ offered.

Another trader agreed that the former TXU Corp.'s debt was "active but not really changed in levels."

"I'm not sure what the catalyst is," the first trader said of the amount of trading and how it has varied throughout the week. "There are enough holders of it. I think everyone has a different opinion on whether it has value or not."

The Houston-based energy company announced a debt exchange last week in which participating noteholders would receive new debt and cash. There has been some speculation on whether the deal was beneficial for investors.

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