Tousa bonds active, lower; Solutia steady on news; Dura Automotive notes unchanged

By Stephanie N. Rotondo

Portland, Ore., Sept. 27 - It was all Technical Olympic USA Inc. in distressed debt trading Thursday.

Traders reported that the homebuilder's debt was "beat up" during the session, as poor housing data came out. One trader quipped that he was not even active in the name but saw no other markets during the trading day.

Outside of Technical Olympic, activity was quiet, traders said.

"It's quiet, but some things are getting done," a trader said.

Solutia Inc.'s bonds were deemed mostly unchanged on the news that the company was one step closer to emerging from bankruptcy. The company said late Wednesday it had agreed with key players in its bankruptcy case.

Meanwhile, Dura Automotive Systems Inc.'s bonds also were holding steady just one day after the subordinated debt fell 2 to 3 points - a lot for a $4 bond. One trader said its current disclosure statement was "put on hold," while a private equity firm slated to invest in the company attempts to "tweak" the terms of a rights offering.

Technical Olympic bonds beat down

Technical Olympic's bonds continued to fall, attributed to follow through on the week, as well as poor housing data.

Shortly before the market closed, a trader quoted Technical Olympic's 9% notes due 2010 at 60 bid, 62 offered and the 10 3/8% notes due 2012 at 25 bid, 28 offered. Come the end of the session, the 9% notes had fallen even more to 59.5 bid, 61.5 offered - which the trader called down 7 to 8 points from the previous levels of 67 bid, 69 offered - while the 10 3/8% notes closed at 26 bid, 28 offered, still off 4 to 5 points.

The trader also saw the 7½% notes due 2015 at 20.5 bid, 23.5 offered, down 3 points, and the 7½% notes due 2011 at 21.5 bid, 22.5 offered.

"All the juniors are starting to move together," he said.

At another desk, a trader said all the day's activity had been devoted to the homebuilder's debt, which he said "got beat up bad."

The trader said the various issues were "all down a bunch," with the 9% notes at 60.5 bid, 61.5 offered, down 7 points from the previous close around 68. He said the 10 3/8% subordinated notes, which closed the previous day at 31 bid, 34 offered, fell to 24 bid, 27 offered.

He said the 2011 paper closed at 21.5 bid, 23 offered, while the 8¼% notes closed at 58 bid, 59.5 offered. Of the 2015 issue, he said it was "in the low-20s, I'm sure."

"[The bonds] were really jumpy all day," he said.

The trader said he had heard there was a news story out on the Hollywood, Fla.-based company. While he said he had not read it, "whatever it was seemed like it was bad."

Elsewhere in the sector, Beazer Homes USA Inc.'s bonds were deemed unchanged. A trader placed the 8 1/8% notes due 2016 at 79 bid, 81 offered.

However, the trader said, Standard Pacific Corp.'s bonds were "quoted a lot" and falling. He said the 6¼% notes due 2014 were down 2.5 to 3 points on the day at 74.5. He said there were some trades in the previous session at 76.5.

According to a Commerce Department report released Thursday, new home sales fell 8.3% in August compared to July's numbers. The seasonally adjusted annual rate slipped to 795,000, the lowest level since June 2000.

Home prices were also seen weaker. The median sales price in August dropped 7.5% to $225,700, compared to prices a year earlier. The percentage slip was the largest in almost 37 years.

The new housing figures come just days after the National Association of Realtors released its existing home sales report, which also showed disappointing numbers.

Solutia notes steady

Specialty chemicals maker Solutia saw its bonds virtually unchanged as the company announced it was closer to emerging from bankruptcy.

A trader, who said he "didn't see any major change in the bonds," pegged the 7 3/8% notes due 2027 at 86 bid, 90 offered and the 11¼% notes due 2009 at 101 bid, 102 offered.

Another trader called the junior debt unchanged at 89.5 bid, 90 offered and the senior issue up a half point to 102 from 101.5.

The first trader, though, said there was little change in the debt but said the equity moved up. The stock closed up 6 cents, or 13.95%, to 49 cents.

Late Wednesday, Solutia said it had come to terms with key players in its bankruptcy case, resulting in a consensual plan of reorganization that would get the company out of bankruptcy by the end of the year. Under the plan, $250 million of new investment will be infused into the reorganized company.

Dura unchanged

Dura Automotive Systems' subordinated debt was mostly unchanged after getting crushed in the previous session.

A trader quoted the 9% notes due 2009 at 2 bid, 2.5 offered. The trader also saw the 8 5/8% senior notes due 2012 at 46.5 bid, 47.5 offered, "about where they have been all week."

The automotive parts marker's hearing on its disclosure statement, originally scheduled for Wednesday, was postponed to Oct. 3. According to the trader, Pacificor LLC, which is slated to backstop a rights offering, is trying to "tweak" the plan to make sure the company stays private. The trader said that as a private company, quarterly and annual filings are not required.

"No one is sure what the big hang up is on that," he said.

If the plan is not changed, the trader added, it could mean more time in bankruptcy for Dura.

"If [Pacificor] doesn't get it done their way, maybe they will walk away," he said.

Broad market mixed

Primus Telecommunications Group Inc.'s 8% senior notes due 2014 traded up slightly, a trader said, to 68 bid, 69 offered from 67.5 bid, 68.5 offered.

Another trader called Tembec Inc.'s debt "quiet, maybe a touch softer." He placed the 8½% notes due 2011 down a half point to 40.5 bid, 41 offered.

The trader also saw Neff Corp.'s 10% notes due 2015 "still sliding lower" to close at 70. He called that down a couple of points.

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