MGM firms slightly pre-numbers; Stations slips, Boyd withdraws offer; NewPage sees modest gain

By Stephanie N. Rotondo and Paul Deckelman

Portland, Ore., Aug. 2 - Earnings season is in full gear and investors were setting their positions in Monday's distressed debt market.

General market positivity was also helping bonds gain ground, traders reported.

"There is nothing that isn't up a point or two," a trader said. "There are bids for everything."

MGM Resorts International Inc. is scheduled to release its quarterly results Tuesday morning before the market opens. Ahead of the release, the casino operator's bonds were slightly better, but on the quieter side.

Also going on in the gaming sector, Station Casinos Inc.'s notes were seen declining in the wake of news that Boyd Gaming Corp. had walked away from the bidding process.

NewPage Corp. is also coming out with numbers this week. The papermaker's debt was one of the more active credits, though the bonds were largely unchanged on the day.

And, First Data Corp. - a typically active name - was also trading on the heavier side, pushing the bonds up about a point on the day. The company will announce earnings early next week.

MGM slightly firm pre-numbers

MGM Resorts International - also known as MGM Mirage - saw its debt heading up "maybe a point, maybe half a point" during Monday's session, a trader said.

The trader pegged the 7½% notes due 2016 at 851/4, a level echoed at another desk as well.

The second trader also saw the 6 5/8% notes due 2015 closing around 84 5/8. However, he said both issues were "kind of right where they have been."

Yet another source placed the 6 5/8% notes at 85 bid, up a point.

The Las Vegas-based casino operator will announce its second-quarter results on Tuesday. Analysts are expecting a loss of 24 cents per share on sales of $1.5 billion, according to SmartTrend.com. Last quarter, MGM reported a loss of 31 cents per share, though analysts had been expecting just 26 cents per share.

Station slips as Boyd withdraws

A trader said that Station Casinos' bonds remain in the low single digits, quoting them Monday in a 2-4 range.

"That's where the quotes were today," he said. "That doesn't mean much at all."

He said that some "small pieces" traded around the 2-2½ bid level.

Another market source said that Station's 6% notes due 2012 gyrated in a bid range between about 2 on the low side and nearly 7 on the high side before going out around 21/4, down nearly 3 points on the session.

On Friday, a market source had seen those bonds go out around 4 bid, down more than a full point on the day, apparently pushed lower on the news that rival Las Vegas-based local casino operator Boyd Gaming, considered a possible bidder for Station's assets, has elected to fold its hand and walk away from the game.

Boyd seeks Station assets

Boyd had been pursuing Station for about a year-and-a-half, making several offers to buy its rival both before and after Station filed for bankruptcy a year ago. Boyd, like Station, operates several Las Vegas casinos that primarily target local visitors and smaller players rather than the kind of high-rolling tourists who head for the more glamorous casinos run by other companies like MGM Mirage and Harrah's Entertainment on the Las Vegas Strip.

The most recent offer was in December, when it offered $2.45 billion in cash and assumed debt for all of Station Casinos, only to be again rebuffed.

Boyd had been considered a possibly buyer of Station's local casino assets under the bankruptcy court auction process, but said Friday that the court-approved process was unfair to non-insider bidders such as itself, and that it made no sense to pursue a transaction under those conditions.

The plan before the court calls for many of Station's properties to be sold at auction without player databases, information technology and other operating tools considered essential for casinos, with those assets to remain with the company.

Boyd also objected to bid requirements that included the buyers having to pay for leased land - a condition it said did not apply to insider bidders like the current owners - as well as Station's right to hire away key executives or other employees from the hired properties after their sale.

Boyd's withdrawal clears the way for the company's current owners, the founding Fertitta family and Colony Capital LLC, to retain control of Station. Bids on its assets were due Monday, with Colony and the Fertittas expected to open the bidding with and offer of $772 million of new equity.

NewPage sees modest gains

NewPage continued to be an active trader, according to market sources who saw the bonds ending unchanged to marginally better.

One trader saw the 11 3/8% notes due 2014 around 933/4, which he called up a quarter-point. But he added that the 10% notes due 2012 were about unchanged around 56.

Another trader said about $10 million to $20 million of the 11 3/8% notes changed hands, all right around 921/2, which he deemed unchanged.

"It was one of the only things that didn't go particularly up," he said.

The Miamisburg, Ohio-based company is scheduled to release earnings on Thursday.

"If they are not good, it will be the only company that isn't," the second trader said of the numbers.

NewPage and certain other domestic papermakers recently got a shot in the arm when members of Congress called for the Obama Administration to look into Chinese paper subsidies. NewPage and its cohorts are alleging that the country is causing damage to the domestic industry with the subsidies, as well as with its lesser-quality products.

NewPage - along with Appleton Coated LLC and Sappi Fine Paper North America - filed a trade case regarding the issue last September.

"That case alleged that Chinese and Indonesian paper producers benefitted from subsidies and were dumping their products in the U.S. market," the group said in a press release dated July 28. "At each stage of the government's review of the cases, the concerns were validated and relief has been authorized."

First Data improves

First Data's debt inched up anywhere from half a point to a full-point, according to traders.

One trader saw the 9 7/8% notes due 2015 post a half-point gain, closing around 811/4. Another market source pegged the notes at the same level, but called it up almost a point on the day.

The Atlanta-based electronic payment processor has scheduled its earnings release for Aug. 10. In the last quarter, the company showed a 16% increase in consolidated revenue. Net loss was $240 million.

Broad market mostly better

Among other goings-on in the distressed arena, ATP Oil & Gas Corp.'s 11 7/8% notes due 2015 gained 2 points by market close, ending around 76, according to a trader.

Tribune Co.'s bonds were "active," the trader added, around 341/2, generically speaking. The newspaper publisher's debt tends to trade on top of one another.

And, General Motor Corp.'s 8 3/8% notes due 2033 were "stronger" at 351/2.

© 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.