Bon-Ton gets boost on sales; Charter pushes higher; GM mixed post-earnings; General Growth gains

By Stephanie N. Rotondo

Portland, Ore., May 7 - Bon-Ton Stores Inc.'s bonds got an 11-point boost Thursday after the company reported what one trader called "decent" April sales.

The surge was also helped by reassuring comments from company management regarding its liquidity position.

Meanwhile, an onslaught of earnings news resulted in mixed moves in Charter Communications Inc., General Motors Corp. and General Growth Properties Inc.

Charter's debt structure moved higher, spurred by a narrower loss for the first quarter. However, at GM, the news was not as good, with the company posting a nearly $6 billion loss. The carmaker's debt closed out the day mixed following the release of the results.

General Growth's bonds, post-earnings, were seen firming by end of business.

Also, First Data Corp.'s notes continued to trade actively and somewhat higher. But it was still unclear what was causing the recent activity in the name.

Bon-Ton gets boost from sales

Bon-Ton Stores' bonds jumped as much as 11 points on the day after the company released its April sales results and gave reassuring comments regarding the company's liquidity.

A trader called the 10¼% notes due 2014 "really active," with $21 million trading around 45.

"They were 30-something" in the previous session, the trader noted.

Another trader also deemed the issue up "roughly 10 points" to the 45 area. But another quoted the paper at 41 bid, 43 offered, up just 5 to 6 points on the day.

The York, Pa.-based retailer saw its comparable store sales fall 5.1% for the four weeks ending May 2, versus year ago sales. Total sales dropped 4.7% to $199.4 million, compared with $209.2 million in 2008.

For the quarter, comparable sales were seen declining 8.6%, while total sales fell 8% to $644.5 million from $700.2 million.

"We were pleased with April sales results, which slightly exceeded our expectations," said Tony Buccina, vice chairman and president of merchandising, in a press release. "Disciplined inventory management resulted in a decrease in comparable store and clearance inventories of 11% and 16%, respectively; consequently, we are in a fresher inventory position as compared with the prior year. Our best performing businesses were children's, hard home, cosmetics and ladies' moderate sportswear. Our weakest performing businesses were furniture and men's better sportswear."

"We ended April with excess borrowing capacity under our revolving credit facility of $165 million, well above the required minimum availability of $75 million," added Keith Plowman, executive vice president and chief financial officer. "As a reminder, this does not reflect the estimated $30 million tax refund, which is expected to be received in the second quarter of fiscal 2009."

Bon-Ton will report its quarterly results on May 21. A conference call to discuss the results is scheduled for 10 a.m. ET.

Charter pushes higher

Charter Communications' debt structure saw some momentum during the session after posting its first-quarter earnings. However, since the general secondary market was having yet another up day, it was hard to tell what was credit-specific and what was market-related, a trader said.

The old first-lien term loan was quoted at 87 bid, 88 offered, up about a half a point on the day, the trader said.

In the bonds, the 10¼% notes due 2010 gained 2.5 points to 95.5, on $11 million traded. The 8¾% notes due 2013 increased more than a point to around 90. While the 11% notes due 2015 ended around the 10 mark, a 1.5-point increase.

At another desk, a trader called the 10¼% notes up 2 to 3 points, also around 95.5.

"Those were up a good bit," he said.

Yet another trader, however, deemed the 11% notes unchanged around 8.

For the three months ended March 31, Charter reported net loss of $203 million, or $0.54 per share, compared with net loss of $359 million, or $0.97 per share, in the same period last year.

Revenues for the quarter were $1.661 billion, up 6.5% from $1.56 billion in the comparable 2008 period.

Adjusted EBITDA for the quarter was of $616 million, up 13% from $545 million in the prior year.

And, pro forma net cash flows from operating activities for the first quarter of 2009 were $187 million, compared with $203 million for the first quarter of 2008 on a pro forma basis.

"Our results for the first quarter confirm that Charter's operations remain strong," said Neil Smit, president and chief executive officer, in a statement. "We are pleased to report solid growth in both revenue and adjusted EBITDA. Our organization is nimble, and we've adjusted to market conditions, achieving efficiencies while remaining committed to investing in new products and improving service that deliver value to our customers.

"I am also pleased with the progress we have made in our financial restructuring and commend our employees for continuing to provide our customers with superior service and value throughout this process," he continued. "We have been working diligently to complete our financial restructuring expeditiously, and look forward to emerging as a stronger company."

The bankruptcy court overseeing its case confirmed Charter's reorganization plan on May 5.

Charter is a St. Louis-based broadband communications company and cable operator.

GM debt mixed

General Motors' term loan was quoted all over the place, depending on who was asked, after the company came out with its first quarter numbers that included net loss of $6 billion, or $9.78 per share, compared with a net loss of $3.3 billion, or $5.80 per share, in the same period last year.

Following the earnings news, some traders had the loan quoted at 58 bid, 59 offered, basically unchanged on the day, while other traders had it quoted at 60½ bid, 62½ offered, up from 59½ bid, 60½ offered.

The bonds were likewise all over the place, according to a trader.

"They were pretty much scattered everywhere," he said.

He pegged the 8 3/8% notes due 2033 at 8, down a tad, and the 7 1/8% notes due 2013 at 7.5, up slightly. The 8.8% notes due 2021 closed at 6, a loss of nearly 3 points, while the 6¾% notes due 2028 ended unchanged at 8.75.

Another trader said there was "nothing new" in the debt, placing the benchmark 8 3/8% notes and the 7 1/8% notes at 8.

Excluding special items, the Detroit-based automotive company had an adjusted net loss of $5.9 billion, or $9.66 per share, in the first quarter, compared with an adjusted net loss of $381 million, or $0.67 per share, in the prior year.

Revenues for the quarter were $22.4 billion, down 47% from $42.4 billion in the first quarter of 2008.

Adjusted operating cash flow for the quarter was negative $10.2 billion, compared with negative $3.1 billion last year.

Cash and marketable securities totaled $11.6 billion on March 31, down from $14.2 billion on Dec. 31, 2008.

"Our first-quarter results underscore the importance of executing GM's revised viability plan, which goes further and faster to lower our break-even point," said Fritz Henderson, president and CEO, in a statement. "Our plan is designed to fix the fundamentals of our business by restructuring and deleveraging our balance sheet, enhancing our revenue capability and dramatically reducing costs. It's focused on taking care of customers every single day, winning with four core brands, and investing in new products and technology, while at the same time accelerating actions to lower our cost structure to return GM to profitability quickly."

GM has until June 1 to either complete a much-maligned debt swap or to file for bankruptcy.

General Growth bonds grow

General Growth Properties' debt headed higher, despite reporting a first-quarter loss from operations.

A trader saw the 5 3/8% notes due 2013 moving up 2.5 points to 60.75, while the 8% notes due 2009 inched up some to 61.

Another trader called the bond 1 to 2 points better, quoting the 5 3/8% notes at 58.5 bid, 59.5 offered and the 8% notes at 60 bid, 62 offered.

The Chicago-based shopping mall owner posted a loss of $165.9 million, or 52 cents per share, from operations. That compared with positive operations results of $215.9 million, or 73 cents per share, in 2008.

General Growth filed for Chapter 11 protections on April 6.

First Data remains active

First Data's paper traded actively yet again, traders reported. But other than a downgrade from Moody's, it was unclear what has been prompting the movement.

A trader called the 9 7/8% notes due 2015 slightly firmer at 71, with $27 million changing hands. Another trader also placed the issue around that level, compared with levels around 70.5 on Wednesday.

Another market source quoted the notes at 70 bid, 72 offered, calling that up more than a point.

Moody's cut its corporate family rating on First Data to B3 from B2, with a stable outlook. The downgrade was blamed on concerns that an increase in profits for 2009 and 2010 would not occur, given the current economic environment.

First Data will report its first-quarter earnings on May 15. A conference call to discuss the results is scheduled for 8 a.m. ET.

Among other financial related names, American International Group Inc.'s 6.9% notes due 2017 traded up 3 points to 52, according to a trader. The move came as the company prepared to release its quarterly results after the market closed Thursday.

Avis loan gains on numbers

Avis Budget Group Inc.'s term loan B jumped up by a number of points in trading on the back of the company's late Wednesday earnings release since financials came in a little better than expected, according to traders.

The term loan B was quoted by one trader at 59 bid, 61 offered, up from around 50 bid, 52 offered on Wednesday. The trader added that he had seen a high of 60 bid, 63 offered earlier in the Thursday session.

A second trader was quoting the term loan B at 59 bid, 62 offered late in the day Thursday. He said that late Wednesday afternoon he had seen levels on the debt as high as 55½ bid, 56½ offered.

"EBITDA was slightly down but wasn't as bad as everyone thought. Stuff trading that low, gets kind of attractive," the first trader remarked.

For the first quarter, total company EBITDA was negative $9 million, compared with positive $31 million in the first quarter of 2008. Excluding unusual items, EBITDA for the quarter was negative $3 million.

Although Avis' net loss did increase on a year-over-year basis, the company did perform better than estimates were expecting, the second trader explained.

Avis' net loss for the first quarter was $45 million, or $0.44 per share, compared with a net loss of $12 million, or $0.11 per share, in the same period last year. Analyst estimates on per share net loss had been around $0.63 per share.

Revenues for the quarter were $1.194 billion, down 17% from $1.445 billion in the comparable 2008 period.

"Business conditions continued to deteriorate through the first two months of the quarter," said Ronald L. Nelson, chairman and chief executive officer, in a news release.

"Although volumes seemed to stabilize in March, we nonetheless faced challenging conditions as both leisure and commercial demand declined significantly as a consequence of the overall economic environment."

"Our rigorous focus on cost saving initiatives combined with aggressive fleet management allowed us to keep fleet levels in line with demand and deliver on our planned EBITDA performance," Nelson added.

Avis is a Parsippany, N.J.-based provider of vehicle rental services.

Sara Rosenberg contributed to this article.

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