Exide Technologies files Chapter 11, debt 'all over the map'; Marfrig rises on asset sale news

By Stephanie N. Rotondo

Phoenix, June 10 - Exide Technologies Inc. was the nom du jour in the distressed debt space on Monday, as the company filed for Chapter 11 protections.

Traders said the news initially sent the company's bonds down about 10 points, though the debt eventually managed to close nearly unchanged on the day.

The filing marks the second time in a decade the battery maker has entered bankruptcy.

"There was not a lot of action outside of Exide," a trader remarked.

Meanwhile, Marfrig Alimentos SA's debt was up as much as 8 points on the day, following news that JBS SA intended to buy some of its assets.

In the broad market, it was a mixed day, though it leaned slightly toward the positive.

A trader said Verso Paper Corp.'s 11¾% notes due 2019 inched up a point to end at 71.

Another trader called Edison Mission Energy bonds "fairly active" in a 59 to 59½ context.

And, Patriot Coal Corp.'s 8¼% notes due 2018 fell a few points to 461/2.

Exide gyrates on filing

Exide Technologies' 8 5/8% notes due 2018 traded "all over the map" on Monday, as the company officially filed for bankruptcy.

A trader said the issue hit lows around 50 and a high around 61 before settling in around 58.

Another trader also saw the paper hit a low of 50, pegging the bonds at 58 bid, 58½ offered at the close.

A third trader said the issue was the day's "big volume guy," as the debt dropped to 50, but ended around 60, which was up 1½ points on the day.

Because of the filing, the bonds are now trading flat, or without accrued interest.

The Milton, Ga.-based battery maker and recycler sought Chapter 11 protections on Monday, citing a shutdown of its recycling plants in California, as well as a declining balance sheet. The company's financials have been soft, especially since Wal-Mart opted to buy batteries from Johnson Controls Inc. instead of Exide in 2010.

Additionally, there is about $31 million in interest payments due in August and a floating-rate convertible note that comes due in September.

Exide was previously in bankruptcy in 2002.

The company is working with law firm Skadden, Arps, Slate, Meagher & Flom LLP and financial adviser Alvarez & Marsal North America LLC on its restructuring effort.

Marfrig gains on sale

Marfrig, the Brazilian meatpacker, is reported to be selling its Seara Brasil unit to JBS for $2.5 billion to $3 billion, according to The Wall Street Journal.

On the news, the company's debt popped, a trader reported.

The 9½% notes due 2020 jumped 8 points, he said, closing around 99 1/8. The 9 7/8% notes due 2017 increased by 7 points to 106.

The sale will help Marfrig cut its massive debt load. The company's net debt currently equals 4.4 times EBITDA.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.