Solo Cup gains on good numbers; Tender offer leaves Six Flags mixed; Swift up; Realogy loan steady

By Stephanie N. Rotondo

Portland, Ore., May 14 - Solo Cup Co. reported "good numbers" on Wednesday, a trader said. As a result, the company's bonds were actively traded and edged higher.

The producer of consumer packaging saw its debt gain a good 4 points on the narrower loss for the first quarter. The better figures came despite a decrease in sales.

Meanwhile, Six Flags Inc. announced a tender offer for its 2010, 2013 and 2014 maturities. The company said the debt exchange served to extend maturities in an effort to avoid default. However, investors had mixed reactions to the news, and traders reported that the amusement park operator's debt was mixed on the day.

Swift Transportation Co. Inc.'s bonds seemed to come off of its recent lows, but traders were at a loss to explain why. The trucking company's notes gained as much as 2 points on the day, leaving one trader to speculate that the debt was "circling back from its lows."

On the bank debt side, Realogy Corp.'s term loan gyrated throughout the session, as the company reported its first-quarter numbers. Traders said the loan ticked up before the results were released, then came back down to end unchanged.

Solo Cup gains on good numbers

Solo Cup reported "good numbers," a trader said, and as a result, "a lot traded."

The trader quoted the 8½% notes due 2014 at 90 bid, 91 offered, up 3 points.

Another trader also said the bonds "traded up," closing 3 points better at 90 bid, 90.5 offered.

Yet another trader called the 8½% notes up 4 points to 90 bid on very busy trading.

For the 13 weeks ended March 30, Solo Cup posted net sales of $461 million, compared to $483 million for the same period in 2007. But despite the increase in sales, the company showed a $2 million net income, versus a net loss of $39 million the year before.

"As expected during the first quarter, we continued to experience the significant benefits that our performance improvement initiatives began to generate in the fourth quarter of 2007," said Robert M. Korzenski, president and chief executive officer, in a prepared statement. "Compared to the first quarter last year, we achieved meaningful improvements in our manufacturing and distribution operations, enhanced the value of our product mix, and better matched price increases to rises in raw material costs."

Solo Cup is a Highland Park, Ill.-based manufacturer of disposable, single-use service products.

Tender offer leaves Six Flags mixed

The announcement of a tender offer prompted Six Flags' debt to end mixed during the session.

A trader called the 8 7/8% notes due 2010 - one of three issues included in the exchange - lower at 90.5 bid, 92 offered. The trader also saw the 9¾% notes due 2013 - also part of the tender - offered at 73.

At another desk, however, a trader called the 8 7/8% notes "up a little on the news," pegging the paper around 90, up 6 points from earlier levels of 84 bid, 85 offered. The trader added that the debt traded as high as 93 on the day.

The trader also saw the 9 5/8% notes due 2014 - the last of the tendered issues - drop from 67 in early trading to 64 by the close.

Six Flags wants to exchange the issues maturing in 2010, 2013 and 2014 in an effort to extend the maturities and avoid default. In exchange for the old notes, the company plans on issuing $400 million of new debt at 12¼%, maturing in 2016.

Holders of the 8 7/8% notes will receive 90 cents on the dollar if the bonds are tendered by May 28. Those noteholders will also receive preference in the exchange. Holders of the 2013 and 2014 paper are slated to receive 70 cents on the dollar.

Six Flags is a New York-based amusement park operator.

Swift bonds edge up

Swift Transportation's debt, which had been on the decline in recent weeks, edged up during Wednesday's trading day for "no apparent reason," a trader said.

The trader said the 12½% notes due 2017 gained 1.5 points to end at 36.5 bid, 37.5 offered. He could not explain the move but speculated that perhaps the debt was "circling back from their lows."

Another trader also pegged the bonds at 36.5 bid, 37.5 offered, up 1.5 points. He was also at a loss to explain the gain.

At another desk, a trader called the bonds up 1 to 2 points at 36.5 bid, 37 offered.

Another market source saw the bonds 2 points better at 36 bid.

Swift Transportation is a Phoenix-based trucking company.

Realogy loan gyrates on numbers

Realogy's term loan seesawed throughout the session, moving up prior to the release of earnings and then coming back in later in the day, according to traders.

One trader said that the term loan ended the day at 84 bid, 85 offered, the same levels where it went out on Tuesday.

A second trader remarked that he saw the loan quoted at 84½ bid, 85½ offered on Wednesday afternoon prior to the first-quarter numbers coming out, and he had the paper going out on Tuesday at 84¼ bid, 85¼ offered. He went on to say that he did not see any quotes on the loan following the earnings news since the numbers came out fairly late in the session and people were "still digging through them trying to figure it out."

For the quarter, Realogy posted net revenues of $1.05 billion, up from $1.37 billion in the first quarter of 2007.

Net loss for the quarter was $132 million, compared to net income of $32 million last year, due mainly to interest expense of $164 million.

And, EBITDA was $4 million, modestly above the company's earlier guidance.

"The first quarter of any year is historically our slowest from an earnings perspective almost entirely due to the seasonality of the residential real estate market," said Richard A. Smith, president and chief executive officer, in a news release. "We still have most of our annual EBITDA opportunity in front of us and, of course, that's where our focus lies.

"Realogy's first-quarter 2008 operating results reflected the continued industry-wide slowdown in U.S. existing home sales but were partially offset by management's focus on overhead, productivity and growth. In April, we saw some early indications that the improving year-over-year unit change trends being forecasted by the National Association of Realtors and Fannie Mae in the back half of 2008 may be starting to develop. While we expect to see some mixed results in the coming months, we are encouraged by these positive signs of activity in April," Smith added in the release.

Realogy is a Parsippany, N.J.-based provider of real estate and relocation services.

Visteon bank debt loses steam

Visteon Corp.'s term loan gave up some ground during the trading session as the cash market in general was off by about an eighth of a point; however, the debt lost a little more than the average name, probably on some profit taking, according to traders.

The term loan was quoted at 84 5/8 bid, 85 5/8 offered, down from 85 bid, 86 offered, traders said.

Visteon did put out some news on Wednesday, announcing that Donald J. Stebbins has been elected as president and chief executive officer, effective June 1, but traders did not think this played a part in the term loan's movement.

Stebbins, who was president and chief operating officer, succeeds Michael F. Johnston in the chief executive officer role. Johnston will continue as executive chairman.

Visteon is a Van Buren Township, Mich.-based automotive supplier that designs, engineers and manufactures climate, interior, electronic and lighting products for vehicle manufacturers and also provides a range of products and services to aftermarket customers.

Broad market mostly better

Merisant Worldwide Inc. reported "better-than-expected" first-quarter figures, a trader said, which pushed the company's bonds higher.

The trader quoted the 9½% notes due 2013 at 76 bid, 79 offered, up a point.

For the first quarter of 2008, Merisant narrowed its loss to nearly $6.5 million, compared with a net loss of $8.6 million the previous year.

Meanwhile, Sea Containers Ltd.'s 10¾% notes that were to have matured in 2006 saw a 47 bid, the trader said. He deemed that unchanged.

"The guy found a seller, which was good," he said.

At another desk, a trader said Charter Communications Inc.'s paper continued to improve, its 10% notes due 2014 closing around 60.5.

NXP's 9½% notes due 2015 were seen 2 to 2.5 points better on a report that the company is in possible merger talks with Infineon. The trader pegged the debt at 92 bid, 93 offered, up from levels around 90 on Tuesday.

Quebecor World Industries' several series of bonds were all being quoted around 47 bid, 3 points above recent levels.

A trader saw Idearc Inc.'s 8% notes due 2016 a point better at 71 bid. Another market source saw them up half a point at 71.5 bid.

A trader said Mrs. Fields' 11½% senior secured notes due 2011 were seen trading around the 75-80 area - but on only a few odd-lot trades - on news reports indicating that the Salt Lake City-based cookie and confectionary company will work with Blackstone Group and with a bondholder group on restructuring its debt.

Sara Rosenberg and Paul Deckelman contributed to this article.

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