Goodyear revolver up two points on long-awaited labor negotiation progress

By Sara Rosenberg

New York, Aug. 21 - Goodyear Tire & Rubber Co.'s revolver traded pretty actively and higher on Thursday as market participants were relieved to hear the company reached a tentative agreement on a new three-year master contract with the United Steelworkers of America.

The Akron, Ohio tire company's revolver was quoted at 93½ bid, 94½ offered, compared to previous levels of 91½ bid, 92½ offered, according to a trader.

The agreement, which was finally reached after "more than four days and nights of virtually non-stop bargaining and analysis," still must be approved by the local union membership, a news release said. Details of the proposed agreement will not be available until the union has the opportunity to share the information with its members.

"This tentative agreement reflects a tremendous amount of work by the company and union," said Jim Allen, Goodyear's director of global labor relations, in the release. "It's a balanced document that supports the business turnaround needs of the company, strengthens our relationship with the USWA and addresses the key concerns of its members and retirees."

The parties have been negotiating since the second week of March.

Charter Communications Inc. continued to rise on Thursday with the term loan B now quoted at 93½ bid, 94 offered, according to a trader, who attributed the move to market technicals. On Wednesday, the trance moved up about ½ a point to 92½ bid, 93½ offered following a ratings upgrade by Standard & Poor's.

Late in the day on Tuesday, S&P announced that it upgraded Charter Communications Inc. and its indirect subsidiary Charter Communications Holdings LLC including raising their senior unsecured debt to CCC- from C. The ratings were removed from CreditWatch negative. The outlook is developing.

S&P said the action follows Charter's termination of its sub-par tender offers, which, if completed, would have been viewed by S&P as tantamount to a default on original debt issue terms.

Qwest Communications International Inc.'s fixed-rate term loan has rallied to 94 bid, 95 offered from last week's levels in the high 80's, according to a trader.

At the start of the week, the Denver communications company announced that it will release second quarter 2003 earnings and operational highlights on Sept. 3 as substantially all of the onsite audit work is complete.

Furthermore, the company revealed that it remains on track to meet the previously stated financial outlook for 2003.

Allegheny Energy Inc.'s second-lien bank debt was quoted at 92½ bid, 95 offered, relatively unchanged as the market showed little enthusiasm for the company's announcement that it terminated the tolling agreement with Las Vegas Cogeneration II, a unit of Black Hills Corp.

Under the agreement, the Hagerstown, Md. energy company will make a $114 million payment to Las Vegas Cogeneration II after closing the previously announced sale of its long-term energy supply contract with the California Department of Water Resources and obtaining the consent of a majority of its lenders.

"With the signing of this agreement, we have substantially achieved our goal of exiting the Western energy markets, thereby significantly reducing our financial exposure to energy trading. We can now refocus fully on optimizing our core generation assets," said Paul J. Evanson, chairman, president and chief executive officer, in a news release.

In response to the announcement, Standard & Poor's stated that although the decision is positive for Allegheny's cash flow stability, it is not enough to have an effect on Allegheny's rating or outlook.

"Allegheny still has many other significant near-term challenges and the outlook on the company is likely to remain negative until it can bring its financial statement filings up to date and exhibit the financial strength to meet its bank loan covenants and upcoming debt maturities," S&P added.

The wireless sector remained strong on Thursday, according to a trader, with Nextel Communications Inc. continuing to be quoted around 99 7/8, Rural Cellular Corp. continuing to be quoted around 97¼ and Western Wireless Corp. continuing to be quoted around 97.

On Tuesday, Nextel, a Reston, Va. wireless company, was seen at 993/4, while Rural Cellular, an Alexandria, Minn. wireless company, was seen at 97 and Western Wireless, a Bellevue, Wash. wireless company, was seen at 96.

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