Cooper-Standard, Visteon still on a tear; ResCap notes mixed; broad market unchanged to firm

By Stephanie N. Rotondo and Paul Deckelman

Portland, Ore., Jan. 11 - The distressed debt market was "better," a trader said Monday, but nothing really stood out as far as activity or price movements.

According to the trader, the problem is that cash is continuing to flow, but no one wants to sell or buy ahead of the calendar.

"It's a very technical market," the trader said. "Spreads are tight."

Still, despite the lack of anything really notable going on, the autosphere continues to be propelled higher. Cooper-Standard Automotive Inc. and Visteon Corp. both saw their debt gaining ground, with no news to explain it.

Residential Capital LLC's bonds were mixed, according to reports given by market sources. One source saw the bonds holding their ground, while another saw the notes improving.

Cooper, Visteon on a tear

The automotive arena continues to be firm, traders reported.

Cooper-Standard Automotive, for instance, remains on an upward path, while fellow parts supplier Visteon was also "moving up," a trader said.

"Both of them keep tracking higher," he added.

The trader said Cooper's 8 3/8% notes due 2014 were "up another 3 to 4 points" around 38, while Visteon's 7% notes due 2014 ended with a 49 handle.

Another trader said that Visteon "kept trading up," seeing its 7% notes having "moved up a few'" [points] to around 49 bid. 'They continued their march higher," he said.

He called the bonds 1.5-point gainers on the day. He said that they had trading in a 46.5 to 47ish context for most of the day, but had moved up to around 49 late in the day. There was "decent volume' in the name.

He also saw Cooper-Standard's 8 3/8% notes up another 5 points on the day to 36 bid, 38 offered, "on decent volume, too."

There was no news out on either credit to explain the day's gains. However, as both have been on a run of late, momentum is probably what is driving the bonds.

Auto-related names have had a bang-up year so far. Both Ford Motor Co. and General Motors Corp. have announced increased sales and both have expressed optimism for 2010. GM's top executive went so far as to recently comment that he was expecting the formerly troubled carmaker to post a profit this year.

Those signs of positivity trickled down to suppliers like Cooper and Visteon, which largely depend on Detroit's Big Three for revenue.

ResCap notes mixed

Market sources gave a mixed picture of Residential Capital's debt during Monday's session.

One trader said there were "a few trades, not a lot" in the GMAC LLC subsidiary, deeming the notes essentially unchanged across the board.

The trader quoted the 9 5/8% notes due 2015 at 98 bid, 98.5 offered.

But another source saw the 8 7/8% notes due 2015 gaining as much as 6 points to end around 89 bid.

There was no fresh news that would have acted as a catalyst for the improvement. But earlier in the month, it was learned that GMAC was receiving about $3.7 billion in bailout funding form the federal government, over half of which would be funneled into the money-losing ResCap unit.

Broad market unchanged to firm

Among other distressed issues, Vertis Inc.'s bonds were moving higher, following news late last week of a debt-for-equity swap.

A trader placed the 13½% notes due 2014 in the low-40s, while the 18½% notes due 2012 finished around 88.

There was "nothing especially interesting" going on in Rite Aid Corp., according to another trader. He called the 9½% notes due 2017 unchanged around 89.

Smurfit-Stone Container Corp.'s debt - like its 8¼% notes due 2012 - were "pretty quiet," a trader said, holding around the 90 level.

A trader saw bankrupt chemical pigments maker Tronox Worldwide LLC's 9½% notes due 2012 "moving up today," with the bonds seen 3 or 4 points higher at 97 bid, 98 offered on "some decent size."

Swift Transportation Co., Inc.'s 12½% notes due 2017 were "up a couple of points," a trader said, around 91 bid, 92 offered.

A trader said that New Page Corp.'s bonds "seemed like they settled back down" after the big rise last week. He quoted the 12% notes at 64 bid, 65 offered, opining that he "didn't think that was much difference" from recent levels, although at another desk, a market source quoted the paper company's 10% notes due 2012 down more than a point, at 83.5. The bonds had gotten as good as 87 on Friday, on no real news, before steadily declining to current levels.

The first trader saw the 10% notes at 83 bid, 84 offered, which he said "actually settled down a point."

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