Ford, GM waver as aid pleas falter; Neiman Marcus active on post-sales numbers; casinos mixed

By Stephanie N. Rotondo

Portland, Ore., Dec. 4 - General Motors Corp. and Ford Motor Co. continued to be on the radar Thursday as the Big Three once again met with Congress in its attempts to secure funding.

The companies' executives, as well as top union officials, reiterated that the need for some sort of bailout was dire. Bankruptcy filings were seen as a last resort, though it is reported the automakers are considering pre-packaged filings if it means they get some type of aid.

Ford and GM's term loan lost some ground during the session. However, it was not clear if the grim picture painted on The Hill was the cause. In the bonds, both companies closed the day mixed.

Same-store sales numbers for November began to surface Thursday. For Neiman Marcus Group Inc., the news was somewhat positive. Though the sales numbers declined for the month, the results were better than the two months prior. Neiman was considered one of the more active issues, especially among retailers.

Claire's Stores Inc. released its same-store sales numbers for the third quarter, as well as its financial results. The company said in a press release that it was well on its way of completing its cost-saving initiatives. Traders, however, could not agree whether the bonds were better or worse.

Casinos, like most of the distressed world, also ended the day mixed. Names like Wynn Las Vegas LLC were deemed down, while others, like Boyd Gaming Corp., gained some ground.

Ford, GM waver as aid pleas falter

Ford Motor and General Motors' bank debt slipped lower possibly on some profit taking, possibly because the rest of the market felt softer and possibly on concerns over the companies' bailout proposals, traders reported.

Ford saw its term loan quoted at 45 bid, 46 offered, down from 47 bid, 48 offered, the trader said.

And, General Motors saw its term loan also quoted at 45 bid, 46 offered, down from 47 bid, 48 offered, the trader continued.

"Don't think people have a lot of faith that the bailout will happen quickly. I think some people think GM will end up having to file," one trader said in explanation of the fall.

A second trader said that there might have been some profit taking going on since the bank debt has rallied so strongly recently. He also said that the cash market in general was down, that might have also pressured the sector.

In regard to the bailout, the second trader remarked, "Lot of political posturing. Going to be one of two things - prepackaged bankruptcy or we'll just have to give them money."

Bond traders saw the automakers' debt mixed during the session as speculation on the companies fate continued.

A trader called Ford's floating-rate notes due 2012 the most active of the company's issues, gaining more than 4 points to close at 44.5. The 5.70% notes due 2010 were slightly better around 65, while the 7 3/8% notes due 2009 dropped 1.5 points to 69.5.

"It doesn't make sense," he said of the improved issues, given that the expectation of a congressional bailout seems slim.

At GM, the 8 3/8% notes due 2033 were seen unchanged around 20, while its financing arm, GMAC LLC, saw its 5.85% notes due 2009 gain some to close around 90.

"Some people think no," he said when asked if he thought the Big Three would get government funding to stay afloat. "It sounds like they want GM and Chrysler to merge. But it seems like [the automakers] don't really have a plan, they are just putting their hand out for more money."

At another desk, GM's 7 1/8% notes due 2013 were seen at 20.5 bid, a 2.5-point decline. GMAC's subsidiary, Residential Capital LLC, however, moved up to 14.5 bid, from 13 bid previously.

On Thursday, Ford and General Motors once again met with Congress to plead their cases for government aid so that they could hopefully return to profitability.

As was reported earlier this week, Ford is requesting access to an up to $9 billion bridge loan in case the current economic crisis worsens or there is a bankruptcy of a major competitor

And, General Motors is requesting access to $18 billion in funds, comprising a $12 billion bridge loan - of which it wants $4 billion this month - and a $6 billion revolving line of credit.

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

Neiman active post sales numbers

Neiman Marcus' bonds were deemed the most active in the retail sector, but traders gave mixed reports on the debt's performance.

One trader called the 10 3/8% notes due 2015 a touch better at 39.25. But another called the notes lower at 38.5 bid, 39 offered.

The luxury retailer posted same-store sales numbers for November during Thursday's session, and the figures were better than had been anticipated. The Dallas-based chain reported an 11.8% decline in same-store sales. However, that was an improvement over October's 27.6% decline and September's 15.8% loss. The better numbers were attributed in large part to hefty discounts at the retailer's stores.

Neiman will report its first-quarter results next week.

Meanwhile, Claire's Stores reported its third-quarter results. But the bonds were little moved by the report.

One trader saw the 9¼% notes due 2015 at 18.5, which he called a tad lower. But another said that issue inched higher, ending at 19. The 10½% notes due 2017 finished at 13.5, up from under 13 previously.

Another trader quoted the 9¼% notes at 18.25 bid, 19.25 offered, from 17.5 bid, 19.5 offered previously. The 10½% notes slipped to 12.5 bid, 13.5 offered from 13 bid, 14 offered the day before.

The trader also saw Claire's term loan B at 36.5 bid, 37.5 offered, down from 38.5 bid, 39.5 offered.

But other bank debt traders deemed the loan unchanged on the day. One source placed the loan at 37 bid, 38 offered from 38 bid, 39 offered, while another saw it at 38 3/8 bid, 38 7/8 offered.

For the third quarter, Claire's reported net sales of $333 million, down 6.8% from the same quarter of 2007. Consolidated same-store sales decreased 6.3%.

Net loss fell to $21.5 million from $13.8 million the year before.

"In the third quarter, our sales performance was negatively affected by the challenging global retail environment, despite our improvements to the merchandising organization, ongoing benefits from our Pan-European transformation project and improved in-store execution," Gene Kahn, chief executive officer, said in a statement. "In addition to these initiatives, we continue to aggressively execute upon our cost savings initiative and we realized approximately $6 million of savings in the quarter. We continue to believe we are on track to achieve the stated target of $15 million savings in fiscal 2008 and in excess of $40 million on an annual basis.

"Although we are facing unprecedented economic upheaval, uncertainty and weakness in consumer confidence, as a strong value provider we anticipate maximizing the available business opportunity," he continued. "This approach benefits from improved planning and strong, disciplined execution and simultaneously builds on the learnings from last year and the consumer research that helped develop and refine our holiday giftables approach. At the same time, we appreciate that the harshness of the current environment may offset the benefit of all of our hard work to reposition the business, and therefore, we are sensitive to the need to continue to reduce costs in excess of our cost savings initiative and minimize capital expenditures."

In the rest of the sector, Bon-Ton Stores Inc.'s 10¼% notes due 2014 were "pretty much flat, maybe down a sneeze" around 14, a trader said.

Wynn slips, Boyd gains

The gaming arena was pretty evenly mixed on the day, traders reported.

Wynn Las Vegas' 6 5/8% notes due 2014 were called 2 points weaker at 72.5, while Boyd Gaming's 7¾% notes due 2012 gained over 3 points to 86.25 bid.

Despite a downgrade from Standard & Poor's, Isle of Capri Casinos Inc.'s 7% notes due 2014 moved up to 43 bid from 41.75 bid.

Station Casinos Inc.'s 6% notes due 2012 fell a point to 29 bid, just one day after bondholders called the terms of the company's debt exchange offer "deficient."

Broad market mixed

Freeport-McMoRan Copper and Gold Inc.'s bonds "dominated" trading again, a trader said. He saw the 8¼% notes due 2015 continue to lose weight, falling 2 points to 68.25. The 8 3/8% notes due 2017 were also down a deuce at 66, while the floating-rate notes due 2015 fell just 1.5 points to 58.5.

NewPage Corp.'s 10% notes due 2012 "got whacked 10 points," the trader added. He saw the bonds printing between 39 and 40, down from previous trades around 50. However, he saw no news that would explain the hefty move.

Washington Mutual Inc.'s holding company paper "rallied pretty good," another trader said. He said the senior paper, like the 4% notes due 2009, moved up 4 points to around 65. The subordinated paper, like the 4 5/8% notes due 2014, were also better at 21 bid, 22 offered.

A trader saw Pilgrim's Pride Corp.'s 7 5/8% notes due 2015 continue to move up, ending at 24 bid, 26 offered.

Swift Transportation Co. Inc.'s 12½% notes due 2017 traded around 11.

Sara Rosenberg contributed to this article.

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