Standard Pacific Sinking in Debt

Standard Pacific(SPF) might be worth more dead than alive.

That's why some are predicting the homebuilder's lenders will eventually force the company to file for bankruptcy to restructure its hefty debt load.

The stock, one of the most heavily shorted of the homebuilders, has seen wild gyrations lately. It has jumped about 15% in the past five days, but it's still down about 80% for the year to around $5 -- giving it the dubious distinction of being one of the worst performers in a heavily battered sector.

Standard Pacific's bonds, meanwhile, are trading at distressed levels.

The company reports its third-quarter results Thursday, with analysts expecting a loss of $1.54 a share, according to Thomson Financial.

While homebuilders of all types are facing mounting losses, Standard Pacific's issues may be the worst of any among the major public building companies. It has heavy exposure to the dismal California housing market, a hefty debt load and hidden dangers lying in its joint ventures.

Debt Overload

CreditSights analysts Frank Lee and Sarah Rowin predict Standard Pacific could be the first among major public builders to be forced to file for Chapter 11 bankruptcy protection.

"It's a matter of time. If Standard Pacific continues on this path, they won't be too far way," Lee says.