Adelphia bonds gain, although debt easier; Allegiance Telecom up again

By Paul Deckelman and Sara Rosenberg

New York, Feb. 11 - Adelphia Communications Corp.'s bonds were quoted higher Wednesday, as the bankrupt Denver-based cable operator overcame an important hurdle in its efforts to emerge from Chapter 11, getting court approval to negotiate an $8 billion exit financing package with prospective lenders - despite the objection of disgruntled shareholders. However, the company's bank debt was heard to have eased.

Adelphia "was up a couple of points as more news leaks out about the recovery plan," said a trader, who quoted what he called its better claim paper, such as its 10¼% notes due 2011 and 9 3/8% notes due 2009 at 106.5 bid, and its lower claim paper, such as its 10¼% notes due 2006 at 103.5.

At another desk, Adelphia's 10 7/8% notes due 2010 were quoted at 103 bid, up from 101.75

Adelphia got a boost Wednesday when New York-based Judge Robert Gerber, who is overseeing the bankruptcy, rejected a legal action filed by the shareholders aimed at stopping Adelphia from going through with its plan, saying that they would have time to voice their concerns later.

The shareholders had objected to management's plans, which would give no distributions to the shareholders.

But even as the bonds were firmer, Adelphia's Century paper felt a touch weaker on Wednesday in sympathy with the rest of the distressed secondary bank loan market, a trader said.

The Old Century paper was quoted at 97.25 bid, 98 offered and the Century revolver was quoted at 96.75 bid, 97.25 offered, according to the trader, who pegged both pieces of debt down about half a point on the day.

"It's been very quiet so far this week. Although the Adelphia Century stuff is a touch lower I haven't really seen it trade. The market felt weaker today," the trader added.

Adelphia also obtained a bridge order to extend its exclusivity periods and now has until April 17 to submit a finalized plan and until June 19 to solicit votes, according to a Feb. 10 filing with the U.S. Bankruptcy Court for the Southern District of New York.

Meanwhile MCI - formerly WorldCom Inc. - sought a two month extension from the bankruptcy court overseeing its restructuring, which would delay the telecom giant' s emergence from Chapter 11 past the original Feb. 28 target.

However, traders saw little or no movement in the company's bonds, quoting parent WorldCom's debt still in the 390s and the old MCI Corp. bonds around 81 bid.

And Allegiance Telecom bonds - which on Tuesday had firmed to bid levels around 39 bid from the mid-30s earlier, on speculation that another buyer might emerge for the assets of the bankrupt Dallas-based company - continued to firm Wednesday, its 12 7/8% notes due 2008 seen up to 41 bid, 43 offered.

In December, Qwest Communications International Inc. agreed to purchase Allegiance network assets in 36 markets for $300 million cash and $90 million in new convertible debt.

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