Ford Motor Bonds Up Despite Downgrades
Ford Motor Co.'s bonds jumped 1/2-3/4 of a point despite Standard & Poor's and Moody's Investors Service downgrading the company. A dealer said the strong equity market boosted trading of the bonds. Ford's '31 bonds were up to 77; its five-year credit default swaps were 20 basis points tighter to 685-695 basis points. The dealer said the market was not surprised the company was downgraded after it announced an accelerated 'Way Forward' restructuring plan Sept. 15. "After they announced the plan it was clear the market wouldn't look at it favorably so it wasn't surprising they got downgraded," he said.
S&P lowered its long-term corporate credit ratings on Ford Motor Co., Ford Motor Credit and related subsidiaries to B from B+. Moody's lowered Ford Motor Co.'s corporate family rating to B3 from B2 and Ford Motor Credit Company's senior unsecured rating to B1 from Ba3. A Ford spokeswoman said the accelerated restructuring plan addresses the challenges the company faces in North America, adding that the ratings agencies recognize its strong liquidity. She would not comment further on the downgrades.
Travelport Dips On Earnings Worry
Travelport's term loan dipped 1/8-1/4 of a point to 100 3/4 after the travel company announced in a second quarter earnings conference call it would not be providing earnings guidance for the rest of the year, according to a dealer. He said trading in the loan had been mostly inactive before the announcement, but since the call there has been heavy trading on the debt.
Travelport, formerly Cendant Travel Distribution Services, reported a $1.1 billion net loss for the second quarter, which includes a non-cash impairment charge of $1.2 billion. The impairment charge arose from the difference between the price at which Travelport was sold to an affiliate of the Blackstone Group and the historical carrying value of Travelport's net assets, according to a company release. It also included $20 million of separation costs from Cendant Corp. and a $11 million restructuring charge. A Travelport investor relations representative did not return calls.