Six Flags boosted by good weather; MagnaChip wants to add debt; Isle of Capri holds on to gains

By Stephanie N. Rotondo

Portland, Ore., Sept. 5 - The distressed bond market ended somewhat better Friday, in line with the slight gains in the equities.

One trader called the day "interesting." He noted that after a 300-point-plus drop in the Dow Jones Industrial Average on Thursday, "people wanted to try to push things down [during Friday's session] but by the end of the day they had worked their way back up."

Traders reported that activity in Six Flags Inc.'s bonds died down a bit, though they still ended another point better. After several sessions of gains - with no news out to prompt the move - one source opined that better weather, and therefore better crowds, is boosting the debt.

Chip maker MagnaChip Semiconductor LLC said in a regulatory filing that it was looking to add more debt to its structure. At one desk, a trader saw the bonds unchanged on the news. But at another desk, a trader deemed the bonds up as much as 3 points on the day.

Among casinos, Isle of Capri Casinos held on to its mid-week gains on the back of its 10-Q filing. Now that those figures are out, one analyst was thinking positively about the debt. The rest of the sector closed essentially unchanged, with thin trading.

Six Flags gets lift

Six Flags' bonds ended the week quieter than they had been, but still managed to wrangle another 1 point-gain.

A trader quoted the 9 5/8% notes due 2014 at 62 bid, 63 offered. At another desk, a trader pegged the issue at 62 bid, 62.5 offered, while yet another trader said the paper was "a little better," trading around 62.

The New York-based amusement park operator's debt has been steadily climbing over the week, but it has been unclear why, with no news to speak of. However, one market source said the company has been befitting from good weather and customers flocking to the parks.

That is further good news for the company, in so far as an influx of park goers puts the company on track to generate break-even cash flow for the summer season, as well as its hopes to be cash-flow positive in the near term.

Still, there is one more obstacle the company must overcome before investors can rest easy. In 2009, Six Flags has $280 million of preferred stock coming due. According to the market source, that hurdle must be jumped before bankruptcy is off the table.

MagnaChip wants new debt

MagnaChip Semiconductor's debt "seemed unchanged," a trader said, even as the company said it was looking to add more debt to its structure.

The trader quoted the 8% notes due 2014 at 36 bid, 39 offered, the floating-rate notes due 2011 at 57 bid, 59 offered and the 6 7/8% notes due 2011 at 57 bid, 59 offered.

"Not sure where they are going to put that new debt," the trader said.

But another trader called the bonds up as much as 3 points on the news, placing the 6 5/8% notes floating-rate notes each up 3 points at 61 bid, 62 offered, while the 8% notes were 2 points better at 39 bid, 41 offered.

In a filing with the Securities and Exchange Commission, the Seoul, South Korea-based chip manufacturer said it was looking to raise $50 million in new first-lien debt. The filing did not specify what type of financing MagnaChip was looking at, but did state that UBS Investment Bank had been retained as advisors.

Isle of Capri outperforms

Since reporting better-than-expected numbers on Wednesday, Isle of Capri's bonds have remained relatively steady, given the multiple-point gains seen right after the results came out.

A trader called the 7% notes due 2014 unchanged at 73.25 bid, 73.75 offered. Another source called the bonds down nearly a point at 73.5 bid.

The casino operator had delayed filing its quarterly assessment, which left some speculating that the numbers were not good. Once the figures came out - and were not so disappointing - the bonds gained at least 2 points.

In a morning research note, Gimme Credit analyst Kim Noland wrote of the unexpectedly bright results, pointing to the company's "cost containment efforts" as the reason for its decent first quarter. Noland went on to state that the current outperform rating remained in place but that at the current price of the bonds, further upside was limited in the near term.

Elsewhere in the gaming arena, a trader deemed Trump Entertainment Resorts Inc.'s 8½% notes due 2015 unchanged at 45.5 bid, 46 offered. He also saw Harrah's Entertainment LLC's 10¾% notes due 2016 at 67 bid, 67.25 offered.

Broad market finishes mixed

A trader said Ford Motor Corp.'s long bonds remained on the active side, quoting the issues generically at 50.75 bid, 51.25 offered.

Idearc Inc.'s 8% notes due 2016 "popped" during trading, a trader said - though in volume, not price. The trader pegged the bonds at 45.5 bid, 46 offered, which he called "a little lower, but still up from their lows."

Another trader called the debt lower around 45, while another market source deemed the notes down 1.5 points to 44.5 bid. Sector peer R.H. Donnelley Corp.'s subsidiary, Dex Media Inc., saw its 8% notes due 2013 down a deuce at 57.75 bid.

After losing weight all week, Burlington Coat Factory Warehouse Corp.'s 11 1/8% notes due 2015 gained about a point to end around 66, a trader said.

Charter Communications Inc.'s 11% notes due 2015 closed weaker around 76.

A trader said Spectrum Brands Inc.'s bonds have "in general, seemed better for sale." However, the 7 3/8% notes due 2015 gained slightly to end at 53, he said. But the 11% toggle notes due 2013 were unchanged around 71.

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