Masonite plummets following call; OSI, Claire's, Michaels down with market; GM, Ford dip continues

By Sara Rosenberg

New York, Jan. 14 - Masonite International Inc.'s term loan traded a couple of points lower during Wednesday's market hours on the back of a lender call that the company recently held.

Also in trading, names like OSI Restaurant Partners LLC, Claire's Stores Inc. and Michaels Stores were all weaker with the rest of the market, and the disappointing retail sales numbers that came out early on in the day certainly didn't help.

In addition, General Motors Corp. and Ford Motor Co. both saw their term loan levels come in some more, also on general market softness.

Masonite term loan falls

Masonite's term loan lost some ground in trading as investors reacted to a lender call that the company participated in during the previous session, according to a trader.

The term loan was quoted at 38 bid, 39 offered, down from previous levels of 44 bid, 45 offered, the trader said.

The trader explained that the lender call was held to discuss future cash need and projections, and the topic of how much debtor-in-possession financing the company would need should it file for bankruptcy projection also came up.

Masonite loan forbearance expires soon

Currently, Masonite is operating under a forbearance agreement with its credit facility lenders, but that agreement is set to expire on Jan. 15.

The forbearance agreement applies to the non-compliance of covenants related to EBITDA metrics as of June 30 and Sept. 30.

In addition, the company has a forbearance agreement regarding a default for failing to make an Oct. 15 interest payment on its senior subordinated notes due 2015 that expires on Jan. 31.

During the forbearance periods, the company is trying to develop an appropriate capital structure to support its long-term strategic plan and business objectives.

Masonite is a Mississauga, Ont.-based manufacturer of residential and commercial doors.

OSI, Claire's, Michaels soften

The cash market in general was weaker on Wednesday, helped along by poor December retail results, and with the heaviness, names like OSI Restaurant, Claire's and Michaels all came under pressure, according to a trader.

OSI Restaurant, a Tampa, Fla., casual dining restaurant company, saw its term loan quoted at 45 bid, 46 offered, down a point on the day, the trader said.

Claire's, a Pembroke Pines, Fla.-based specialty retailer offering value-priced jewelry and accessories, saw its term loan quoted at 38½ bid, 39 offered, also down a point, the trader continued.

And, Michaels, an Irving, Texas, specialty retailer of arts, crafts, framing, floral, wall decor and seasonal merchandise for the hobbyist and do-it-yourself home decorator, saw its term loan quoted at 58½ bid, 59½ offered, down about a point as well.

"Has been some pressure in retail names. Hard to say whether it's specific to that sector versus a general fade today. More general market malaise again, but [retail results] are definitely part of the bearishness," the trader remarked.

Retail sales down more than expected

On Wednesday, the U.S. Census Bureau announced advance estimates of U.S. retail and food services sales for December, which came out worse than people were anticipating.

For the month of December, U.S. retail and food services sales were $343.2 billion, a decrease of 2.7% from the previous month and 9.8% below December 2007.

Total sales for the 12 months of 2008 were down 0.1% from 2007.

And, total sales for the October through December 2008 period were down 7.7% from the same period a year ago.

General Motors, Ford weaken

General Motors and Ford both continued to slide lower during Wednesday's trading session also in sympathy with the general cash market, according to a trader.

General Motors' term loan was quoted at 45 bid, 50 offered, down from 47 bid, 52 offered on Tuesday, the trader said.

And, Ford's term loan was quoted at 36 bid, 39 offered, down from 38 bid, 40 offered, the trader continued.

General Motors is a Detroit-based automaker. Ford is a Dearborn, Mich.-based automotive company.

Cash down, LCDX steady

The overall cash market was softer by about a half a point to a point on the day, but LCDX 10 held firm at previous levels, according to a trader.

The index was quoted at 76.35 bid, 76.65 offered, basically unchanged from Tuesday's levels, the trader said.

Meanwhile, equities were lower, with Nasdaq closing down 56.82 points, or 3.67%, Dow Jones Industrial Average closing down 248.42 points, or 2.94%, S&P 500 closing down 29.17 points, or 3.35%, and NYSE closing down 210.16 points, or 3.79%.

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