Adelphia debt active; Delta continues to descend; Trico off on missed coupon

By Paul Deckelman and Sara Rosenberg

New York, May 12 - Adelphia Communications Corp.'s non-co-borrower bank debt was very active on Wednesday in the distressed market, bank loan traders said, with the company's TCI paper and FrontierVision singled out.

Traders said that the bankrupt Greenwood Village, Colo.-based cable operator's TCI obligation traded between 98.5 and 98.75, and FrontierVision traded between 99.375 and 99.625, pretty much unchanged on the day.

No fresh news was seen out on the stricken cable company, which is exploring the possible sale of some of its assets - or perhaps even all of them - but which is also laying plans to emerge from Chapter 11 as a stand-alone company, management's preferred option.

Adelphia's 8 3/8% notes due 2017 were seen down a point at 108.5 bid, while its 10 7/8% notes due 2010 were at 105.5 bid, likewise down a point.

Elsewhere, Delta Air Lines bonds continue to rapidly lose altitude after the Atlanta-based carrier officially acknowledged for the first time in a government filing that it might face bankruptcy if it cannot get its pilots to agree to much bigger paycuts than the captains are willing to take.

Delta's 8.30% notes due 2029 - which were heard to have fallen about five or six points earlier in the week - were at 37 bid, 39 offered Wednesday, while its 7.70% notes due 2005 ended at 59 bid, 60 offered and its 7.90% notes closed at 42 bid, 44 offered, all down a point on the day.

Another loser was Trico Marine Services, whose 8 7/8% notes due 2012 dropped to 42.5 bid, 44.5 offered from prior levels at 44 bid, 46 offered, after the Houma, La.-based provider of maritime services to the offshore petroleum industry announced late Tuesday that it has elected to utilize its 30-day grace period relating to the payment of interest under its outstanding $250 million of 8 7/8% notes.

Trico said that the non-payment of the interest due on May 15 does not constitute an event of default under the indenture governing the notes until the expiration of a 30-day grace period.

The company said it had made no decision on whether it will make the interest payment before the expiration of the grace period.

Following Trico's announcement, Moody' Investors Service cut its rating on the bonds to Ca while Standard & Poor's dropped the rating to CC.

Pegasus drops

And a trader saw Pegasus Satellite's bonds "ugly" after the Bala Cynwyd, Pa.-based distributor of television programming to rural markets said that it would not be able to file its 10-Q quarterly earnings report in a timely manner.

He quoted Pegasus' zero-coupon/13½% notes having dropped to 47 bid, 48 offered from 53 bid, 55 offered two days ago. Its 12 3/8% notes were offered at 66 while its 9¾% notes due 206 were at 66.5 offered.

Mirant loan trades but flat

Back on the bank debt front, Mirant Corp's loan saw some small trades between 51.75 and 52.25, basically going out "flat" on the day, according to a trader.

On Tuesday, the Atlanta-based power company won bankruptcy court approval for an extension to its exclusivity periods. The company will have until Dec. 31 to file a reorganization plan and until Feb. 28 to solicit acceptances.

CalGen loans ease

Bank debt of another power generator, Calpine Generating Co. LLC, was off about a quarter of appoint on the day, basically with the rest of the bank loan market, with the first lien paper quoted at 98.625 bid, 99.375 offered and the second lien paper quoted at 91.5 bid, 93.5 offered, according to a trader.

"It moved around today just a little bit. Maybe not in the Street but between accounts," a second trader said.

CalGen is a wholly owned subsidiary of Calpine Corp., a San Jose, Calif. power company.

Levi loans steady, bonds weaker

Levi Strauss & Co.'s term loan B stayed around the 105.5 bid, 106.5 offered level Wednesday, after rallying by about half a point to that area during Tuesday's session on news of a possible sale of the company's Dockers operations, which generates annual worldwide revenue of approximately $1.4 billion.

Although an asset sale usually brings bank debt levels back to where the paper is callable, in this case, levels headed higher immediately following the news. Some speculated that the movement could be due to a possible need for lender approval for Levi to sell the asset, which could in turn result in lenders demanding to be paid a premium for the paper. Under the credit agreement, the paper is non-callable for two-and-a-half years from the time the deal was done and then it is callable at par.

Citigroup Inc. has been retained by the San Francisco branded apparel company to assist with the potential Dockers sale.

A bond trader saw Levi's bonds "a little heavier, maybe on profit-taking," following the rise Tuesday in the notes on the Dockers announcement. While that news - the first time the company has officially acknowledged market scuttlebutt that's had Dockers on the auction block for weeks, maybe even months - had boosted the Levi bonds about two points on Tuesday, he said that in Wednesday's dealings, Levi gave it right back, the 7% notes due 2006 dipping to 87.5 bid, 88.5 offered from Tuesday's finish at 90.5 bid, 91.5 offered.

Levi's other bonds - the 11 5/8% notes due 2008 and the 12¼% notes due 2012 - followed the same pattern, with the former ending at 92 bid, 94 offered, while the latter closed at 90 bid, 92 offered.

But the trader pointed out that the bonds, even though down two or three points on the session, were "still higher than they were [Tuesday] morning before the [Dockers] news, and are up three points or so for the week."

At another desk, however, a trader saw the Levi notes "hanging in there," disagreeing with the first trader's assessment of the direction the Levi notes were going in while seeing the levels around the same - 87.25 bid, 88.25 offered on the 7s, 91 bid, 92 offered on the 121/4s, and 92 bid, 94 offered on the 11 5/8s, all "just tighter than [Tuesday's] context."

© 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.