Tousa rebounds, Standard dips; MagnaChip boosted; retailers gain; Trump notes up

By Stephanie N. Rotondo

Portland, Ore., Oct. 15 - The first trading day of the week saw the bonds of Tousa Inc. - the former Technical Olympic USA Inc. - recovering from a beat down received Friday, with the bonds up about 2 points.

There was no news on the company to account for the gain, but one trader speculated the market was calming down after last week.

Meanwhile, Standard Pacific Corp.'s bonds were down as much as 4 points, though again there was no explanation for the move.

However, traders did have a reason for gains in MagnaChip Semiconductor LLC's debt. The chip maker reported preliminary third-quarter results, which came in 3% above projected guidance.

It was a good day for retailers - their bonds, at any rate. Traders said retail names like Claire's Stores Inc. and Bon-Ton Stores Inc. were moving up on a good amount of volume.

"They have been active for a while now," a trader said of Bon-Ton's notes.

Continued takeover buzz is being touted as the catalyst for upward movement in Trump Entertainment Resorts Inc.'s bonds. Traders reported that the bonds were active and higher by almost a point on the session.

Tousa rebounds, Standard dips

After taking a beating in Friday's trading, Tousa's bonds were seen rebounding Monday.

A trader said the bonds "bounced back a little," with the 9% notes due 2010 closing at 66 bid, 66.5 offered and the 10 3/8% subordinated notes due 2012 moving as high as 18.75, up from Friday's closing level of 16.5 bid, 17 offered.

Another trader said the bonds were about 1½ points better on the day, the 9% notes at 67 bid, 68.5 offered and the 10 3/8% notes at 18.5 bid, 20 offered.

At another desk, a trader said the bonds were "moving around, all up 1 to 2 points, with the seniors up 2 points and the juniors up a point."

He placed the 9 % notes at 67.75 bid, 68.75 offered, while the 8¼% notes due 2011 rose to 67 bid, 68 offered. Among the subordinated bonds, the 7½% notes due 2011 ended at 18 bid, 19 offered, the 10 3/8% notes closed at 18 bid, 20 offered, and the 7½% notes due 2015 finished at 17.5 bid, 18.5 offered.

Another trader saw the notes "down at first, but steadily crawling their way back," with the 7½% notes due 2011 at 16.5 bid, 18 offered, some low trades in the 17ish area, but then some higher prints around 19 to 21. The 8¼% notes were trading at 63.5 bid, 64.5 offered in the morning, and 65 bid, 66.5 offered later in the day, while the 9% notes moved up to 67.5 bid, 68.5 offered from 65.5 bid, 67 offered earlier.

The trader saw "no news," on the company, but suggested that short covering was a possibility. "There was not a ton of activity in it," he said.

Still, the first trader said there is some concern in the market regarding how the company will cure a default at its Wellington LLC joint venture or if the company is even able to do so.

The Hollywood, Fla.-based homebuilder said it had received a notice of a breach of covenant in late September. The breach involved the loan-to-value ratio of the joint venture's credit facility. The company has until Friday to cure the breach, which would require a $10 million equity infusion.

Elsewhere in the sector, a trader said Standard Pacific's debt was down 3 to 4 points across the board.

The trader said he had not seen any news to warrant the loss, but "there must be something. There's got to be."

The trader pegged the 9¼% notes due 2012 at 62 bid, 63 offered, noting that the bonds were at 65 bid, 66 offered last week. But another trader called the debt down just 1½ points, its 6½% notes due 2008 at 87.5 bid, 89.5 offered and its 9¼% notes at 61 bid, 63 offered.

Standard Pacific will release its third-quarter results after the market closes on Oct. 25. A conference call will be held Oct. 26 at 11 a.m. ET.

Beazer Homes USA Inc. announced Monday that it would seek consents from its senior and senior convertibles noteholders to approve amendments to the indentures, as well as a waiver.

Beazer sued holders of those issues after the collective group told the company it was in default for not filing its quarterly numbers in a timely manner, as well as delivering said financials to noteholders. Among the consents Beazer is seeking is admission that the homebuilder is only obligated to send bondholders financial statements after it has filed with the Securities and Exchange Commission. Beazer has denied that it was ever in default.

A trader said the 8 5/8% notes due 2011 caught an 80 bid in morning trading and added there were no trades in the 6 7/8% notes due 2015. Another trader called the bonds little changed, with its 8 5/8% notes hanging in at 82 bid, 84 offered and its 8 3/8% notes due 2012 at 81.5 bid, 82.5 offered.

MagnaChip boosted by numbers

Chip maker MagnaChip posted better-than-expected preliminary numbers for the third quarter of fiscal 2007, which prompted its bonds to gain as much as 3 points.

A trader quoted the floating-rate notes due 2011 up 2 points at 91.5 bid, 92.5 offered. At another desk, a trader said the bonds were up 2 to 3 points, its 8% notes due 2014 at 75 bid, 76 offered, its 6 7/8% notes due 2011 at 86 bid and the floaters at 89 bid.

Another trader called the 8% notes 1 point better at 73.5 bid, 75.5 offered, while its 6 7/8% notes were likewise up 1 point at 87 bid, 89 offered and its floating-rate notes at 90 bid, 92 offered.

In a press release, the Seoul, Korea-based company said it expected revenue for the third quarter to be around $200 million, 3% over prior guidance. The company also said it expects fourth-quarter revenue to increase 20% over the third quarter.

A conference call is scheduled for Oct. 25 to discuss the earnings. The official report will be released before the call.

Bon-Ton, Claire's better

Retailers had a good day Monday, traders reported, at least in morning trading.

"Most retailers have done well today," a trader said. He placed Bon-Ton Stores' 10¼% notes due 2014 up at 96 bid, 97 offered.

"Retailers across the board were stronger in the morning," another trader stated. He quoted Claire's Stores' 10½% notes "up a couple" at 83 bid, 83.5 offered. He said the bonds traded as high as 84.5 bid, 85.5 offered during the session.

Another trader also said that Claire's bonds were higher during the session, but came off their highs to close just 1 point better across the board. He pegged the 10½% notes at 83.5 bid, 84.5 offered and the 9¼% notes at 92 bid, 92.5 offered.

"They had a good day," he said.

But, unlike the first trader, he called Bon-Ton's bonds "probably down small," at 96.25 bid, 97.25 offered. He said the bonds closed Friday at 97 bid, 98 offered.

A trader saw Linens 'n Things' floating-rate notes due 2014 down 2 points at 68 bid, 70 offered, citing a ratings downgrade by Moody's.

While there was no news out specific to Claire's, Bon-Ton did announce Monday that it had started selling goods through its web site. The move toward e-commerce comes after the company reported that its September same-stores sales fell 7.1%, attributed to warmer weather and cautious consumers. Total sales for the five-week period ending Oct. 6 slid 6.5% to $307.9 million from $329.4 million a year ago.

Trump up, active

Trump Entertainment's 8½% notes due 2015 were actively traded, market participants said, and pushed upward by continued takeover buzz.

A trader pegged the bonds a point higher at 88 bid, 89 offered, noting that they have "moved up steadily, a quarter point to a half point a day" since takeover speculation started coming back earlier in the month.

"We definitely continue to hear rumors," he said.

Another trader said the notes "definitely opened stronger" than Friday's closing level around 87.5 bid, 88 offered, seeing them at 88 bid "right out of the gate this morning," and finishing at 88.5 bid, 89 offered.

However, yet another trader, while seeing the active volume levels, called the bonds ½ to ¾ point lower at 88 bid, 89 offered.

Broad market mixed

A trader said Hines Horticulture Inc.'s 10¼% notes due 2011 were up at 74.25 bid, 74.75 offered, though he did not know why.

He did note that there have been rumors circulating about the nursery supplier. One such rumor is that a private equity shop is looking to take a large stake in the company, or possibly inject equity. However, he said the buzz was "nothing substantiated."

The company announced last Thursday that it has retained Miller Buckfire & Co., LLC and Kirkland & Ellis LLP to assist management and the board of directors in evaluating strategic alternatives.

Last week, Nasdaq said it was delisting the company's stock, which had been suspended since August.

James River Coal Co.'s 9 3/8% notes due 2012 did not trade Monday, a trader said, but was catching higher bids around 83.

Blockbuster Inc.'s 9% notes due 2012 traded early in the session near 93.

A trader said Swift Transportation Co. Inc.'s bonds were beaten up, its 12½% notes due 2010 off 1½ points at 65 bid, 65.5 offered.

Tembec Inc.'s bonds "slid a bit," a trader said, attributed to a weaker equity market. He said the 8½% notes due 2011 closed at 41.5 bid, 42 offered, while the 7¾% notes due 2012 ended at 40.75 bid, 41.75 offered. He also saw the 8 5/8% notes due 2009 at 48 bid, 49 offered.

"Things have been funky lately," he said of the debt.

Paul Deckelman contributed to this article.

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