Ply Gem jumps as investor to buy notes; Chemtura firms from post-filing lows; American Capital has 'great' move

By Paul Deckelman and Sara Rosenberg

New York, March 20 - Door and window manufacturer PlyGem Industries Inc.'s bonds rose sharply during the final minutes of Friday's trading, thanks to a late-session announcement that the company's equity sponsor will buy a majority of those outstanding notes.

An asset-sale announcement by Pilgrim's Pride Corp. helped the bankrupt poultry producer's bonds to take flight.

And bondholders gave good reviews to Blockbuster Inc.'s announcement that the Dallas-based movie-rental company had reached agreement with its bank lenders to amend and extend its credit facilities.

Showing that there is indeed life after Chapter 11, Chemtura Corp.'s bonds came back from the lows they'd hit after Thursday's court filing.

And a trader said that American Capital Strategies' bonds had a "great" move, although there was no news seen out on the investment company to explain the rise.

Ply Gem gets late boost

Late in the day, Ply Gem Industries, a Cary, N.C.-based maker of windows, doors and other building products, announced that affiliates of its financial Sponsor, CI Capital Partners, LLC, will make "a major cash investment" to acquire a majority of the company's outstanding 9% senior subordinated notes due 2012.

A market source saw those bonds jump more than a dozen points on the session to the 35 level, from around 22 previously.

Although there wasn't time for much trading - the announcement first came up after 4 p.m. ET, when many market participants had long since headed for the exits - the source still saw volume of around $15 million, most of it in large-sized transactions, before trading finally wound down for good.

When it made its announcement, Ply Gem also said that it intends to amend the notes' indenture to give the company "greater financial and operating flexibility."

Ply Gem's president and chief executive officer, Gary E. Robinette, said in a statement that "having our sponsor acquire a majority of our notes will give our company greater control over our debt and can provide the company with additional near-term liquidity during these challenging economic times."

Ply Gem is owned by CI Capital Partners, LLC, formerly Caxton-Iseman Capital, Inc., a New York-based private equity firm.

Chemtura off post-filing lows

Chemtura's bonds - which had fallen on Thursday in the wake of the chemical company's Chapter 11 filing - were seen having bounced back, although on reduced activity levels.

While the company's 6 7/8% notes due 2016 had traded more than $20 million on Thursday in falling about 2 points to the 26 level, on Friday, those bonds were seen having moved back up to 28.5, with $5 million changing hands.

A trader saw the 6 7/8% notes due 2026 issued by one of Chemtura's predecessor companies, Witco, as having moved back up to 17 bid from 16.25, also on $5 million traded.

And the 7% notes coming due on July 15, issued by Chemtura ancestor company Great Lakes Chemical Corp., had firmed to 20.5 bid from 19 on Thursday, with $4 million traded.

Pilgrim's Pride gets asset-sale aid

Another company currently undergoing a Chapter 11 reorganization, poultry producer Pilgrim's Pride Corp., announced that it has agreed to sell its complex in Farmerville, La., to Foster Farms for $80 million - not exactly chickenfeed.

That helped to push the Pittsburg, Texas-based company's bonds several points higher, with its 7 5/8% notes due 2015 moving up to 66 bid from 62.5 on Thursday, "a nice move," a trader said, with $6 million of the bonds changing hands.

Meanwhile, its 8 3/8% notes due 2017 got as good as 36.325 bid, up from 31 on Thursday, with $8 million changing hands.

Pilgrim's Pride, which sought protection from its creditors on Dec. 1, said that the transaction is subject to the parties entering into a purchase agreement and needs the approval of the bankruptcy court. The company expects the transaction will be completed within 30 days from signing the purchase agreement.

The Farmerville operations include a processing facility, cook plant, hatchery, feed mill, protein conversion plant and any associated inventory.

Capital move by American Capital

A trader said that American Capital Strategies' 6.85% notes due 2012 had moved up to a final round-lot level of 42, well up from 38 the previous week, an "absolutely" great move.

The credit, he said, "is not one that you see every day.

There was no fresh news out on the Bethesda, Md.-based investment company, which specializes in management and employee private equity buyouts, acquisitions, recapitalizations and mergers and acquisitions.

Blockbuster up on financing news

Apart from those bankrupt names, another company making news was Dallas-based movie-rental operator Blockbuster, with a trader seeing its 9% notes due 2012 move up to 45.75 bid 46.5 offered, from prior levels at 43.5 bid, 44.5 offered.

"A ton of bonds were trading today," he declared.

During its fourth-quarter earnings call, Blockbuster said that it has reached agreements with JPMorgan Chase Bank and two of the largest lenders under its existing revolving credit facility, to amend and extend the facility through Sept. 30, 2010.

Jim Keyes, the company's chief executive officer, told analysts and investors on the call that the commitments from those lenders represent 65% of the expected total principal amount of the extended revolver, which is about $250 million.

Blockbuster is working toward funding the agreement in the next 60 days, he said. The company said it will be starting discussions with its other lenders and is optimistic about future conversations.

"We've been working hard to replace this revolving credit facility, and what we've found is that the high cost of funds in today's credit markets has indeed created a challenge," Keyes said.

"We're confident, however, that the company has adequate liquidity within the existing facility to allow us the time necessary to explore every possible source of existing and new funding to achieve the lowest possible cost of capital."

Blockbuster management declined to provide details on the pricing of the agreement but called it "expensive."

A subsequent Securities and Exchange Commission filing indicated that the amended and extended revolving credit facility is expected to be priced at Libor plus 1,000 basis points with a 3.5% Libor floor.

During the question-and-answer session of the call, Blockbuster chief financial officer Tom Casey said the company hopes to restructure its balance sheet when more practical costs of capital return to the markets.

In the meantime, the higher cost facility will motivate the company to delever over the next 12 to 18 months, he said.

Royal Caribbean bonds get that sinking feeling

Elsewhere, a trader said Royal Caribbean Cruises' 7¾% notes due 2010 were down about 3 or 4 points, "because traffic on the cruise lines have been horrible," with pricy shipboard vacation trips among the first luxuries being sacrificed as consumers cut their expenses.

The Miami-based cruise line operator's 7¼% notes due 2016 were down 2 points to the 46 level Friday,

The trader noted a recent article which pointed out that "Alaska and European cruises have just been getting slaughtered, because of the downward price pressure on cruises."

Jennifer Lanning Drey contributed to this report

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