Dura bonds better; Doral debt steady; James River pushes higher; Transmeridian up

By Stephanie N. Rotondo

Portland, Ore., June 7 - A big sell-off in Treasuries hit the high-yield and distressed markets Thursday, a trader reported, leaving the sectors feeling even heavier on the week.

The trader said the day was busier than it had been recently, but not in distressed bonds.

Since last week, the bond market has experienced a lull in activity, which traders overall have not been able to explain. The only cause traders have mentioned is a lack of fresh news, or new ideas hitting the market.

Still, of the names that have been active in the last few weeks, Dura Automotive Systems Inc. is continuing to see gains, though it is unclear why. A trader pointed out that the distressed automotive parts maker's bonds have garnered at least 25 points in recent weeks.

Meanwhile, Doral Financial Corp. is maintaining the gains it earned after the company announced it had received a second, unsolicited bid for the bank. A trader also said the preferred issues are trading with a greater than 8% yield.

A new $150 million mixed shelf registration was given credit for pushing James River Coal Co.'s bonds higher. The company said proceeds from the shelf could be used to pay down debt.

In another energy name, Transmeridian Exploration Inc.'s bonds were also better as a new director takes his seat on the board.

Dura better

Dura Automotive's bonds are continuing to run up, a trader said, adding that the company's debt has gained about 25 points in the last couple weeks.

"That seems to be a name that everyone is really excited about," he said. "I don't know why, but it is."

He pegged the 8 5/8% notes due 2012 "up a little further" at 65 bid, 66 offered. He also saw the 9% subordinated notes due 2009 at 15 bid, 16 offered.

Another trader saw the 8 5/8% notes at 66 bid, 67 offered, up another 5 points on the day, and its 9% notes 16 bid, 17 offered, up a point.

At another desk, a trader called the senior paper up 4 points at 65.5 bid, 66.5 offered.

Meanwhile, Dura's second-lien term loan climbed another quarter of a point in very active trading, according to a trader.

The second-lien debt ended the day at 97 bid, 97¾ offered, up from 96¾ bid, 97½ offered on Wednesday, the trader said.

The trader explained that the debt has been trekking higher for a couple of weeks now as the company's bonds have experienced positive momentum and loan lenders "are feeling more confident about the value here."

Elsewhere in the automotive arena, a trader saw Dana Corp.'s bonds - which had firmed smartly on Wednesday on asset-sale news from the bankrupt Toledo, Ohio-based automotive components maker - as having surrendered some of those gains Thursday. The 6½% notes due 2008 were off 2 points at 99.5 bid, 100.5 offered.

The trader also saw Remy International Inc.'s bonds, which had also increased on Wednesday, as unchanged.

Doral bonds steady

A trader said Puerto Rico-based Doral is seeing its bonds, as well as its preferred paper, staying up after news earlier in the week that a second company has proposed a rival bid for the struggling bank.

The trader quoted the floating-rate notes due next month at 99.25 bid, 99.75 offered, essentially unchanged from the highs hit on the back of the announcement. It was the preferred issues, however, that the trader found "highly interesting."

The trader said all the preferreds were trading with an at least 8% yield. He said the 7% and 7¼% preferred issues, as well as the 4¾% convertible issue, had an 8½% yield, while the preferred issue that trades on the Pink Sheets under the symbol "DORLO" was up to a 9.3% yield.

James River notes higher

James River Coal's bonds were reported better, as the company announced that it had filed a $150 million mixed shelf registration.

A trader said the 9 3/8% notes due 2012 were moving around 99.5 bid, 99.75 offered.

The coal producer will use the proceeds from the mixed shelf for working capital and general corporate purposes, including acquiring other businesses or assets, as well as outstanding debt repayment.

Transmeridian firms

Oil and gas drilling company Transmeridian gained in its bonds, a trader said, as a new director took his seat on the board.

The trader quoted the 12% notes due 2010 up at 97.25 bid, 97.5 offered.

Wolfgang Rupf, chief executive officer of AKV Altking (Verwaltungs) GmbH, will take the seat on the nominating and governance committee vacated by Fernando J. Zuniga y Rivero, who retired at a stockholders' meeting held on May 17.

Broad market mixed

A trader said Movie Gallery Inc.'s 11% notes due 2012 were down 1.5 points to 83.5 bid, 84.5 offered.

Linens n' Things' floating-rate notes, called active by one trader, were slated at 82.5 bid, 83.5 offered by another market player.

Tembec Inc.'s 8 5/8% notes due 2009 were up half a point at 61 bid, 62 offered.

A trader said 155 East Tropicana LLC, also known as Hooters, was seeing its debt trading around par, though he said the bonds were "a total crapshoot."

Sara Rosenberg and Paul Deckelman contributed to this article.

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