Visteon gains accelerate; GM gets boost; Lyondell shakes off Apollo news; Clear Channel steady

By Stephanie N. Rotondo

Portland, Ore., March 1 - The distressed debt market "still feels pretty good," a trader said on Monday.

But despite the overall firm marketplace, the trader noted that JPMorgan Chase & Co.'s high-yield and leveraged finance conference in Miami took some players away from their desks, making for lackluster trading volumes.

Visteon Corp.'s debt continued to make headway in Monday's session. The bonds added another 6 points to its gains, on top of the 15 points earned Friday, following the release of the company's quarterly results.

General Motors Corp.'s debt was also better in Monday trading. A trader attributed the strength in the bonds to an article published in Barron's over the weekend.

Away from the autosphere, Lyondell Chemical Co. saw its bonds holding steady, even as reports indicated that an Apollo-management led group was planning to reject Reliance Industries Ltd.'s bid for the chemical maker.

Visteon gains accelerate

Visteon's bonds continued to gain ground, following the trend set Friday when the company released improved quarterly results.

A trader called both the 7% notes due 2014 and the 8¼% notes coming due Aug. 1 up 5 to 6 points around 81.

Another trader also said the bonds "continued to move up," seeing them 5 to 6 points better at 82 bid, 83 offered.

"They are trading around the same [levels]," he said of the issues.

On Friday, the bonds had gained as much as 15 points after the company reported its first-ever annual profit.

For the fourth-quarter, the Van Buren Township, Mich.-based company saw sales of $2.03 billion, versus sales of $1.65 billion the year before. Net income came to $276 million, or $2.12 per share. That compared with a net loss of $346 million, or $2.67 per share, for the fourth quarter of 2008.

For the year, Visteon reported its first-ever yearly profit, with net income coming to $128 million, or 98 cents per share, on sales of $6.68 billion. In 2008, the company reported a full-year loss of $681 million, or $5.26 per share, on sales of $9.54 billion.

"Our restructuring, ongoing cost-reduction initiatives and ability to keep overhead costs aligned with reduced sales helped drive significant year-over-year improvements in cash flow and earnings, despite significantly lower vehicle production volumes and challenging industry conditions," said Donald J. Stebbins, chairman and chief executive officer, in the earnings release.

"Through many aggressive and very difficult actions, Visteon's overhead cost structure was essentially flat as a percentage of sales in 2009, despite a nearly 30% decline in product sales. We are focused on providing a competitive cost structure for our customers and will continue to aggressively look for opportunities in this area."

Also, the company said that it won $562 million of new business in 2009, along with $593 million in "gross re-win business."

As of Dec. 31, Visteon had a cash balance of $1.1 billion.

GM bonds get boost

Also in the automotive arena, General Motors' debt "moved up" on the back of an article published in Barron's over the weekend, according to a trader.

The trader said the benchmark 8 3/8% notes due 2033 gained about 1½ points to "32-ish" in active trading.

In the Barron's article, writer Andrew Bary speculated that Detroit-based GM could be the biggest and hottest initial public offering of the year. The potential deal is valued anywhere from $50 billion to as much as $63 billion, according to Bary.

It was also noted that those looking to get in on the ground floor of the IPO should attack the bonds, which will be converted to stock and warrants in the "new GM."

Lyondell shakes off Apollo news

Lyondell Chemical's notes were unaffected by news reports indicating that a creditor group led by Apollo Management was expected to reject an increased takeover bid from Reliance Industries Ltd.

A trader called the 9.8% notes due 2020 "pretty much unchanged" at 813/4. However, he said the 7.55% notes due 2026 "might be up about a point" around 811/4.

The Apollo-led-group reportedly wants to merge Lyondell with Hexion Specialty Chemicals, which is owned by Apollo.

Last week, Reliance upped its previous bid for Lyondell to $14.5 billion. However, some in the know have speculated that Reliance will have to increase the offer even more to be considered.

Clear Channel stays steady

Clear Channel Communications Inc., which has been an active one of late, quieted down some in Monday trading, according to traders.

A trader called the bonds up slightly to unchanged, pegging the 6¼% notes due 2011 at 95¾ and the 10¾% notes due 2016 at 781/2.

Another trader deemed the 11% notes due 2016 up about a point around 70.

The San Antonio-based multimedia company said it will release its fourth-quarter 2009 results at 4 p.m. on March 11. A conference call to discuss said results will be held at 5 p.m. ET.

Broad market unchanged to firm

In the rest of distressed debt land, American International Group Inc.'s 8.175% notes due 2058 "looked like the most active bond," a trader said. He saw the issue gaining 6 points during the session to end around 72.

General Growth Properties Inc.'s debt was quiet ahead of the company's after-market close earnings release. A trader said the bonds were essentially unchanged, the 7.20% notes due 2013 at 113 and the 5 3/8% note due 2013 at 1063/4.

And, Blockbuster Inc.'s 9% notes due 2012 remained around the 20 level, a trader said, though he added that the debt was "not overly active."

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