Revlon bonds lower as offer deadline nears; Adelphia loans firmer

By Paul Deckelman and Sara Rosenberg

New York, March 18 - Revlon Consumer Products Corp. bonds were quoted down around five points Thursday as investors reevaluated the worth of those bonds ahead of the scheduled expiration of the company's previously announced exchange offer for them.

Among bank loan investors, Adelphia Communications Corp.'s debt seemed a little better bid, with quotes moving higher by about a quarter of a point. However, trading activity was said to be light to non-existent.

Revlon's 9% senior notes due 2006 and 8 1/8% senior notes due 2006, which had been hovering at levels around 104 bid just a few days ago, were being quoted at 98.5 bid and 97.75 bid, respectively, on Thursday. Its 8 5/8% senior subordinated notes due 2007 were quoted down about two points on the session at 88.5 bid.

The cash-strapped New York-based cosmetics company is in the process of taking out those bonds via a complicated exchange offer deal announced back on Feb. 23 and which is scheduled to expire at 5 p.m. ET on Friday.

Essentially, it is offering holders of the senior notes 400 shares of stock per $1,000 principal amount of bonds tendered and holders of the subordinated notes 300 shares per $1,000 principal amount.

At the time the offer was announced, Revlon shares were trading around $3.50, making for a potentially lucrative payoff for the bondholders. But in the interim, they've come sharply down from that high, closing Thursday at just $2.57.

"You have to look at the stock price, that's the key," a trader said. "If the current price were to hold till the end of trading Friday, when the offer expires, the bonds would in theory be exchanged for stock worth $1,028 per $1,000 principal amount on the senior, and $771 per $1,000 principal amount on the subs.

"Looking at the common," the trader added, "the subordinated bonds should be a lot lower."

Meantime, the fall of the senior bonds from levels above par to levels below it might be taken as a sign of investor pessimism about what Revlon stock will be worth on Friday.

But "wherever the stock moves," a distressed-debt trader said, "it should be over with by [Friday]."

Adelphia loans stronger

Elsewhere, Adelphia Communications subsidiary Century Communications' revolver was being quoted Thursday at 92.25 bid, 93.25 offered, firmer than previous levels of 92 bid, 93 offered. The Old Century bank debt was quoted at 95 bid, 96 offered versus Tuesday's levels of 94.5 bid, 95.5 offered. And the New Century bank debt was quoted at 94 bid, 95 offered compared to Tuesday's levels of 93½ bid, 95 offered, according to a trader.

"It seems like early in the week there were offers and now it started to catch a bid," the trader said, explaining that in general the distressed bank loan market had a better tone as well.

"I think a lot of people are in Las Vegas watching the [NCAA championship] basketball games. And, if they're around here, they are watching them on television, so there was very little trading today," the trader added.

The bankrupt Greenwood Village, Colo. cable company' bonds meantime were quoted up two or three points on thin trading, a trader said, with the 10¼% notes due 2006 rising to 95 bid, 96 offered from 92 bid, 95 offered previously.

Adelphia's convertible issues likewise were doing better, pegged up two points at 43 bid, 44 offered.

Air Canada's 10¼% notes due 2011 were seen having tumbled to 33 bid, 35 offered from prior levels at 39 bid, 41 offered after Trinity Time Investments, which is slated to make a major equity investment in the bankrupt Canadian air carrier, threatened to walk away from the deal because of what it called the intransigence of the carrier's unions in refusing to discuss changes in their pension arrangements.

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