Adelphia bonds better as asset sale closes; Collins & Aikman loan slides

By Paul Deckelman and Sara Rosenberg

New York, July 31 - Adelphia Communications Corp.'s bonds were seen better Monday, with investors apparently encouraged by the long-delayed closing of the bankrupt Greenwood Village, Colo.-based cable company's $17 billion-plus sale of its assets to Time Warner Cable and Comcast Corp. Also higher were the bonds of Adelphia's Century Communications Corp. subsidiary.

In the automotive arena, Collins & Aikman Corp.'s bank debt plummeted by a couple of points, with traders reporting a lot of sellers in the market. The bankrupt Troy, Mich.-based automotive interior components maker's bonds were also seen falling back down, its recent push upward now just a distant memory.

Dura Operating Co.'s bonds - which got solidly pounded on Thursday and Friday after the automotive components maker reported poor quarterly numbers - were seen finally having bottomed out and actually beginning to head back upward a little from their recent lows.

And Delta Air Lines Inc. bonds, and those of rival Northwest Airlines Corp., were seen better, possibly on the late Friday news of progress on federal pension reform legislation that contains a provision letting troubled airline operators stretch out the time in which they can make payments to their underfunded pension plans.

A trader said Adelphia Communications' 10¼% notes due 2011 were a point better at 61.5 bid, 62.5 offered, while the bankrupt company's Century Communications unit's 9½% notes due 2005 were 2 points better at 108 bid, 109 offered.

At another desk, a market source quoted Adelphia's 9 7/8% notes due 2007 at 59.5 bid, up a point on the day.

The first trader noted that Monday was the day that Adelphia formally completed its long-awaited $17 billion-plus sale of its assets to Time Warner Cable and Comcast - a deal that at times looked like it might never get done due to incessant wrangling between various Adelphia creditor classes, including the parent company's bondholders and Century's, over who would get what share of the deal proceeds.

Those questions still have not been fully hashed out - although Adelphia said last week that some of its creditors and bondholders had reached an agreement with the company which would help in its efforts to emerge from Chapter 11 sometime in the fourth quarter.

Adelphia was also helped in its efforts to get the sale done by a favorable ruling from the judge overseeing its case, allowing the sale of the assets to proceeds even though the creditor disputes remained unresolved and the company had accordingly not yet filed a final formal plan of reorganization.

Collins & Aikman loans plunge

In the auto sector, bank loan traders said that Collins & Aikman paper was a couple of points lower Monday as there appeared to be a lot of sellers in the market.

One trader said that paper closed out the session down about 6 points at 80 bid, 82 offered.

"I think there are just a lot of people blowing out of it," the trader remarked.

A junk bond market source said that the company's 10¾% notes due 2011 dropped to 16.5 from prior levels at 21. Meanwhile, the company's subordinated 12 7/8% notes due 2012, which had been trading at around 3¼ cents on the dollar, dipped to 2½ cents.

That junior paper had been trading as high as the 6-7 level just a few weeks ago, and the senior paper was around 30, pushed upward by speculation that the company might receive some bids for its domestic assets from potential buyers such as Wilbur L. Ross, who already bought Collins' European division for the international auto parts conglomerate that the billionaire investor is building. However, there has been no formal announcement that any bids have been received, causing the speculation that had pushed the bonds and the bank debt higher to die down.

Autos mostly quiet

Elsewhere in the automotive realm, "there was not too much going on," said a trader who saw sector bellwether General Motors Corp.'s benchmark 8 3/8% notes due 2033 at 82 bid, 82.5 offered, while its General Motors Acceptance Corp. financing arm's 8% notes due 2031 was likewise unchanged, at 98 bid, 98.5 offered. GM arch-rival Ford Motor Co.'s 7.45% notes due 2031 were at 73.25 bid, 74.25 offered, and its Ford Motor Credit Co.'s 7% notes due 2013 finished the day at 87.75 bid, 88.25 offered, both down ¼ point.

Dura rebounds a little

The trader did see Dura Automotive Systems Inc.'s bonds "settle down a little" after two tumultuous sessions which saw the Rochester Hills, Mich.-based automotive parts supplier's bonds in freefall, with its Dura Operating 9% subordinated notes due 2009 dropping some 20 points on Thursday and then a couple of more points on Friday to levels in the mid 20s, losing half of their value in response to poor earnings. The company's 8 5/8% notes due 2012 meantime fell about 10 points over the two days to the mid 70s.

In Monday's dealings, the trader said, the bonds came back and regained "a little" of their lost ground, although he acknowledged that in the final analysis "it was not much."

He saw the 9s up 1½ points at 26 bid, 27 offered, while the 8 5/8s were 11/4s point higher at 76.25 bid, 77.25 offered.

Bankrupt former GM subsidiary Delphi Corp.'s 6.55% notes due 2006 were seen unchanged at 81.5 bid, 82.5 offered, and the Troy, Mich.-based parts company's 7 1/8% notes due 2029 were likewise steady at 77 bid, 78 offered.

Delta, Northwest higher

A trader saw the bonds of Delta, the bankrupt Atlanta-based Number Three U.S. airline carrier, up 3/8 point at 26.75 bid, 27.l25 offered.

He also saw the bonds of Northwest, the bankrupt Eagan, Minn.-based Number-Four carrier higher as well, with its 8.70% notes due 2007 at 51 bid, 52 offered, up 1½ points.

The airlines got some good news late Friday when the House of Representatives passed and sent on to the Senate a long-awaited bill that would reform the nation's corporate pension set-up. Among other provisions, the bill would give troubled airlines as long as 17 years to straighten out their underfunded pension obligations, versus the seven years that most other companies would get under the bill.

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