Visteon Corp.'s bonds outperformed the rest of the sector last week on market expectation the auto supplier is close to being bought by either a group of private equity firms or by French competitor Valeo Group. Its 7% '14 bonds were up three points to 95-96, while its 8 1/4% '10 bonds reached 102. A Visteon spokesman said the company will not comment on market speculation or rumors. A Valeo spokeswoman did not return a call.
Visteon reported improved second quarter results at the beginning of August. Net income was $50 million, compared with a $1.2 billion net loss in the same period last year. EBITDA was $119 million for the second quarter, a $47 million increase from the $72 million reported in the first quarter of 2006.
Auto bonds were also up across the board on news that Ford Motor is cutting staffing and benefit costs by 30% as part of a restructuring plan. A dealer said the market views the cuts, along with the lower cost of oil, as a positive for the auto sector. A Ford spokeswoman would not comment on details of the company's restructuring plan saying it was all speculative.