Wynn falls on numbers, MGM also weaker; Realogy boosted by Apollo aid; Freescale slides, Nortel slips

By Stephanie N. Rotondo

Portland, Ore., Feb. 25 - Wynn Las Vegas LLC's bonds slipped some during Wednesday trading, after the company released quarterly numbers that were well short of expectations.

The gaming operator's bonds slipped a point in active trading, traders reported. The company attributed its turn to a loss versus a profit to overall weaker numbers in the Las Vegas area, as well as to a hefty tax expense.

Also, MGM Mirage's debt took a downward turn as well. The company is reportedly looking to secure a $1.2 billion loan to complete its CityCenter project.

Realogy Corp. saw its debt gain a fair amount despite a dismal financial statement. Market sources attributed the gains to comments made by the company that its owner, Apollo Management LP, would give it "financial assistance" as needed throughout the year.

Freescale Semiconductor Inc.'s term loan dropped a couple points after the company said it had received nearly all the tenders needed for its proposed incremental term loan. The company also released pricing on the deal.

Meanwhile, Nortel Networks Corp.'s bonds finished a tad weaker as the company announced yet another round of job cuts.

Overall, market sources seemed disappointed by the day's activity.

"It's not as busy as it should be," said one source.

Another source said that while there was "still ash around," it did not seem to be working for anyone. He also noted that he "saw buyers in off-the-run names that rarely trade."

Wynn, MGM weaker

Wynn Las Vegas' bonds dropped about a point following the release of its quarterly report late Tuesday, according to market sources.

A trader pegged the "new" 6 5/8% notes due 2014 around 71 and the "old" 6 5/8% notes due 2014 at 69 bid, 70 offered, both down a point.

But another trader deemed the 6 5/8% notes due 2014 at 70.5, calling that higher, "but only a little bit." He added that about $60 million to $70 million traded.

Wynn posted a net loss of $159.6 million, or $1.49 per share, for the fourth quarter, as a rocky tourism market and a $98.8 million tax expense impaired the company's bottom line. That compared with a profit of $65.5 million, or 57 cents per share, the previous year.

Excluding certain items, profit was 7 cents per share. Revenue dropped 14% to $614.3 million.

"Starting in October, we experienced a dramatic deceleration in business," Wynn said in a statement. "The fourth quarter of 2008 was substantially worse than during the prior year as consumers chose to stay at home and significantly reduced their leisure budgets."

In an afternoon comment, Gimme Credit analyst Kim Noland said that Wynn's numbers fell below expectations.

"Although we expected Wynn Las Vegas to be weak given the horrible revenue numbers being reported for the Strip in the fourth quarter, we had hoped the addition of Encore (opened in December) revenue and EBITDA would improve stability of operating results," she wrote. "While we expect that Encore will start to add to results in a more meaningful way so that this quarter's results could be a low tick, management's conservative view about Las Vegas makes us cautious."

Elsewhere in the sector, MGM Mirage's debt closed "a little softer," a trader said.

The trader saw both the 7½% notes due 2016 and the 5 7/8% notes due 2014 trading with a 45 handle, calling that 1 to 2 points weaker on the day.

Another trader placed the 5 7/8% notes, the 7½% notes and the 6 7/8% notes due 2016 at 45.5 bid, 46.5 offered, also down 1 to 2 points.

Yet another source deemed the 6 5/8% notes due 2015 3 points weaker at 46 bid.

Earlier in the week, MGM said it was in talks with Deutsche Bank AG to obtain a $1.2 billion loan needed to complete its CityCenter project.

Realogy jumps on Apollo aid

Realogy's bonds got a decent boost - despite poor numbers - after the company's owner, Apollo Management LP, said it would give the struggling company financial assistance.

A trader said the 12 3/8% notes due 2015 jumped to around 13 from the "mid-single digits" on the news.

Another market player quoted the 10½% notes at 20.5 bid, 21.5 offered, a gain of about 3 points, while the 11% toggle notes due 2014 inched up slightly to 13 bid, 13.5 offered. The source also saw the 12 3/8% notes at 12 bid, 14 offered, a gain of 7 points.

Realogy, the owner of Century 21 and Coldwell Banker, said its net loss increased to $1.91 billion for fiscal 2008 due to writedowns of assets. The company had about $1.79 billion of charges related to its asset values.

Revenue was also lower at $3.48 billion, compared with revenue of $4.51 billion in fiscal 2007.

Still, the company said that it remained in compliance with its debentures. Its senior secured leverage ratio was 4.95 to 1. The Parsippany, N.J.-based company is required to keep the ratio at or below 5.35 to 1 to remain in compliance.

"Apollo has advised the company that, based upon management's current financial outlook, it will provide financial assistance to Realogy, to the extent necessary, in meeting its senior secured leverage ratio and cash flow needs through Dec. 31, 2009," Realogy said in its earnings release.

Freescale slides, Nortel slips

Freescale Semiconductor's term loan dropped by a couple of points in trading after the company revealed that it already has close to enough bonds exchanged to create a roughly $700 million incremental term loan, according to traders.

The term loan was quoted at 38 bid, 44 offered, with one trader saying that it was down around four points on the day and another trader saying it was down even more since he saw levels on Tuesday of 45 bid, 50 offered.

The "company [is] going to layer in some size. Dilutive to bank holders," the second trader remarked in explanation of why the term loan traded lower.

On Wednesday, Freescale said that as of Tuesday, it had received commitments with respect to approximately $2.89 billion aggregate principal amount of existing notes and that based on the amount of commitments delivered, it would incur approximately $694 million in new incremental term loan debt.

Elsewhere in the technology arena, Nortel Networks announced another around of job cuts, which resulted in its debt losing some ground.

A trader quoted the 10 1/8% notes due 2013 at 14 bid, 15 offered and the floating rate-notes due 2011 at 13 bid, 14 offered. Another trader called the floaters a point weaker at those same levels.

Nortel will cut another 3,200 jobs form its work force, the company said. That is on top of 1,800 cuts announced late last year.

Meanwhile, Motorola Inc.'s 6 5/8% notes due 2037 traded at 59, a trader said.

Broad market mixed

United Rentals Inc.'s bonds were "busy," a trader said, pegging the 6½% notes due 2012 at 77.

Another source saw the 7% notes due 2014 losing more than 2 points to close at 54 bid.

NOVA Chemicals Corp.'s 7.4% notes coming due in April stayed "kind of where its been," a trader said, at 97.5 bid, 98.25 offered.

A "bunch" of General Growth Properties Inc.'s 6¾% notes due traded during the session at 31 bid, 32 offered, the trader added.

Sara Rosenberg contributed to this article.

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