Owens Corning bonds rebound; Adelphia resumes gains

By Paul Deckelman and Sara Rosenberg

New York, June 29- Bonds of Owens Corning continued to gyrate Thursday, bouncing higher in Thursday's dealings after having been solidly beaten lower on Wednesday.

Traders also saw Adelphia Communications Corp. heading higher, the bankrupt Greenwood Valley, Colo.-based cable operators bonds having firmed of late on positive developments coming out of its bankruptcy court.

Winn-Dixie Stores Inc.'s bonds initially moved higher, apparently helped by the news that the Jacksonville, Fla.-based supermarket chain operator had filed its Chapter 11 reorganization plan - only to come back down later on to end little changed.

Bankrupt Toledo, Ohio-based insulation maker Owens Corning's bonds have recently been yo-yoing around - its 7 1/8% notes due 2018 shooting up to levels around 122 bid in late May after its various creditors came to agreements with the company to back its proposed reorganization plan.

However, the bonds began falling after that, dropping into the mid-80s and then the lower 80s, as the process seemed to drag on and on. This week, though, the bonds had firmed back up to the high 80s, after court approval of certain aspects of the company's plan - only to retreat to the low 80s in Wednesday's dealings.

But that was then - and this is now. A trader saw the 7 1/8s jump to 87 bid, 89 offered, well up from prior levels at 82 bid, 84 offered, although he admitted: "I don't know what's happening with Owens."

Another trader opined that now that the company is moving closer to filing its restructuring plan filed and aiming to come out of bankruptcy perhaps as early as Oct. 31, "people are trying to figure out the equity valuations" in the name. He saw the bonds open at 85 bid, 87 offered, and then move "up a couple" of points, to around 87 bid, with no offers. "The bid at the close was the offering this morning," he declared.

While Owens Corning's bonds were better, traders saw little real movement in the bonds of bankrupt Lancaster, Pa.-based floorcovering maker Armstrong World Industries Inc., which frequently move in tandem with Owens Corning. A trader quoted Armstrong at 72 bid, 74 offered, "still in that same area."

Adelphia higher

Also on the upside, Adelphia Communications' 10¼% notes due 2006 were seen up two points at 53 bid, 55 offered. A trader also saw its 10¼% notes due 2011 up a deuce as well, at 57 bid, 58 offered.

Adelphia's bonds have lately caught a bid, following agreements that will facilitate the sale of several joint ventures the company is involved in to Comcast Corp. That in turn will clear the way for the larger deal, selling the company's non-joint venture operations to Time Warner and Comcast.

On Wednesday, judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York had removed one of the final legal hurdles barring Adelphia from selling itself to Time Warner Inc. and Comcast, in a deal estimated to be worth $17 billion.

The judge confirmed an order allowing Adelphia to sell a majority interest in two cable properties it jointly owns with Comcast. That will let Comcast buy out Adelphia's interest in Century-TCI and Parnassos, which between them have over a million subscribers in markets in Los Angeles, upstate New York and northeastern Ohio.

Getting that out of the way will in turn facilitate the sale of the remaining approximately 80% of the company to Time Warner Cable NY and Comcast, which will complete the breakup of what was once the fifth-largest cable operator in the United States, while strengthening Comcast's position, and Time Warner's at the top of the industry.

In conjunction with clearing the deal for the joint ventures, Gerber on Wednesday entered an order allowing the sale of the rest of Adelphia's assets even though Adelphia's proposed reorganization plan has not yet been approved by its creditors and confirmed by the judge, as is usually the case in bankruptcy proceedings. Instead, Gerber's order separates the asset sale from the bankruptcy process, which has been mired for months in disputes about how the sale proceeds will be distributed among creditors.

Adelphia can now seek regulatory approval for the sale without waiting for its creditors to accept of its overall restructuring plan.

Adelphia spokesperson Paul Jacobson told Prospect News on Thursday that the Federal Communications Commission has indicated it expects to vote on the Adelphia transfer of assets to Time Warner and Comcast by mid-July.

FCC Chairman Kevin J. Martin has also said publicly that he believes the commission will try to address the sale by the middle of July.

Adelphia is working to close the deal before July 31.

Adelphia last week filed an amended version of its restructuring plan, taking the expedited sale process into effect. It has been in bankruptcy for four years now, driven into Chapter 11 by revelations that it had $2.3 billion in debt off its balance sheets.

Winn-Dixie ends little moved

Winn-Dixie's 8 7/8% notes due 2008 were seen not much changed, traders said, hanging in around 87 bid, despite the news that the company had filed its reorganization plan. A trader saw its notes push as high as 89 bid, 90 offered in intra-day trading, before retreating back to 86 bid, 88 offered, unchanged on the session.

GM revolver weaker

In the bank-loan market, levels on General Motors Corp.'s revolver widened out a bit on Thursday, as the bid side dropped off by about half a point while the offer side held steady, according to a trader.

The revolver closed out the day quoted at 94 bid, 95 offered, compared to previous levels of 94½ bid, 95 offered, the trader said.

The Detroit giant's 8 3/8% notes due 2033 were meantime seen up half a point to 76 bid, 77 offered, though on what one trader described as light trading.

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