Gymboree, Toys ‘R’ Us stay strong post-earnings; iPayment downgraded, but debt ends higher

By Stephanie N. Rotondo

Phoenix, June 13 – Distressed bonds were firm as the week came to a close.

The Gymboree Corp. and Toys ‘R’ Us Inc. remained topical, just one day after the companies reported quarterly results. Though both posted wider losses, the bonds rose in the previous session and continued to do so on Friday.

Even iPayment Inc. paper moved into higher territory, despite a rating downgrade from Standard & Poor’s.

While the market had a generally positive tone, a trader said liquidity was a bit muted. He attributed the lack of activity to it being a Friday, as well as to the U.S. Open and the World Cup.

“There’s not a lot of [people] paying attention,” he said.

Gymboree’s 9 1/8% notes due 2018 remained strong Friday, just one day after the company reported first-quarter earnings.

“They were trading around a good bit today,” a trader said, seeing the issue at “plus/minus” 73.

“That’s up a little bit more,” he said.

Another market source pegged the notes in a 73 to 74 context, which compared to Thursday’s closing levels in a 71½ to 72½ range.

For the first fiscal quarter ended May 3, the San Francisco-based retailer reported net sales of $272 million, down from $292.8 million the year before. Same-store sales were meantime down 10%, including online sales.

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