Harrah's notes unchanged; ATP firms, BP holds ground; Smurfit pares losses; Blockbuster steady

By Stephanie N. Rotondo

Portland, Ore., June 11 - It was "definitely a better day" in the distressed debt market, a trader said on Friday.

However, with monthly retail sales indexes showing weaker-than-expected readings, "I thought maybe that would shut the door."

Luckily, that was not the case, he said, and the market moved up an average of half a point.

"Barring something real ugly over the weekend," he said, Friday's show of strength "bodes well for Monday."

Harrah's Entertainment Inc. saw its bonds trading actively, but unchanged. Monthly revenue figures from Missouri and Atlantic City casinos were released during the session, which showed Harrah's leading revenue gains.

Meanwhile, ATP Oil & Gas Corp. continued to move up in trading. Still, the bonds are lower week over week.

Smurfit-Stone Container Corp.'s debt lost some ground in the previous session, but managed to make up some of those losses come Friday. According to one market source, the movements in the name were likely due to investors "jockeying for position."

And, Blockbuster Inc. held in there during the last trading day of the week. In sector news, rival NetFlix Inc. announced a multimillion-dollar equity repurchase program.

Harrah's notes unchanged

Harrah's Entertainment's debt was unchanged, even as new revenue reports from regional gaming centers indicated that the casino operator was leading the pack.

A trader said about $10 million to $20 million of the 10% notes due 2018 changed hands, all around 80. Another trader said the issue "seems unchanged" around 793/4.

Harrah's Kansas City, Mo.-based casinos saw the biggest revenue gains for the month of May, according to the area's monthly report. Revenue improved 7% year over year to $18.47 million. The growth was in addition to its 4% revenue gain in April.

Kansas City casinos were up generally, as the region saw a 0.3% upswing in revenues overall. Total revenue was $63.8 million.

Atlantic City also put out its monthly report, which showed its 11 casinos losing a total of 9% in revenue during the month of May. That compared to a slight gain seen in April.

Overall, the New Jersey casinos raked in $319.7 million. Of that, $225.6 million came from slot play, while $94 million came from table games.

Those figures represented an 8.5% and 10.2% decline, respectively.

Harrah's Entertainment is a Las Vegas-based casino operator.

ATP firms, BP holds its ground

ATP Oil & Gas saw its bonds trading up, though its sector peer BP plc was "probably unchanged," a trader said.

The trader pegged ATP's 11 7/8% notes due 2015 around 68, while BP's 5¼% notes due 2013 were seen around "95-ish."

At another desk, a trader said ATP's bonds were up "about a point and a half" at 67½ bid, 68½ offered. That level was echoed by yet another trader, who noted that trading was lighter than the previous day, with only about $7 million to $8 million turning over.

ATP Oil & Gas is a Houston-based oil exploration company, with drilling targets located in the Gulf of Mexico.

Smurfit pares losses

Smurfit-Stone Container's debt headed higher during the last day of the week, paring the losses incurred the day before.

A trader said the 8% notes due 2017 were up "a solid 1½ points" at 811/4, with about $10 million changing hands. He opined that volume and gyrations in the credit were due to people "jockeying for position" ahead of the company's release of its post-reorganization equity.

But another trader saw the debt structure ending mixed. He saw the 8% notes gaining 1½ points to end at 811/4, while the 8¼% notes due 2012 and the 7½% notes due 2013 were both "up a couple" at 80½ bid, 81 offered. However, the 8 3/8% notes due 2012 slipped about half a point to close around 78.

Smurfit-Stone is a Chicago-based manufacturer of paper packaging products.

Blockbuster bonds steady

Blockbuster bonds were holding their ground, traders reported.

A trader said the 9% notes due 2012 were "probably unchanged" at 8½ bid, 9 offered. But another said the paper was "up fractionally," also around the 9 mark.

The second trader also saw the 11¾% notes due 2014 inching up a tad to 58½ bid, 59½ offered.

On Friday, Blockbuster's rival NetFlix announced a $300 million stock buyback. The company will repurchase the shares, either privately or through the open market, through 2012.

Blockbuster is a Dallas-based movie rental chain.

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