Adelphia, airline bonds continue lower; American Commercial Lines loans set sail

By Paul Deckelman and Sara Rosenberg

New York, Jan. 13 - Bonds of bankrupt cable operator Adelphia Communications Corp. were seen lower Thursday in a generally lethargic trading session ahead of the Friday's scheduled early pre-holiday close and Monday's full closure for the Martin Luther King holiday, participants said. They also saw the bonds of the airlines coming in, in the wake of expectations that the carriers are likely to post more than $2 billion in red ink for the just-completed fourth quarter.

In bank loan dealings, the distribution of American Commercial Lines LLC's restructured bank debt caught the attention of many distressed loan traders Thursday, as the paper started trading around at levels above 101 for the second-lien debt and above 102 for the third-lien debt, according to a trader.

The $225 million second-lien term loan A was quoted at 101 bid, 101.5 offered, and even tighter at 101.125 bid, 101.375 offered, according to a trader.

The $139 million third-lien term loan B, meanwhile, was quoted at 102 bid, 102.5 offered, the trader added.

The term loan A is priced with an interest rate of Libor plus 400 basis points and the term loan B is priced with an interest rate of 10% and a 3% PIK.

JPMorgan and Bank of New York are the agents on the restructured debt that is being obtained in connection with the Jeffersonville, Ind.-based marine transportation and services company's exit from bankruptcy to satisfy obligations to senior secured lenders.

American Commercial Lines had sought Chapter 11 protection on Jan. 31, 2003.

Its 11¼% notes due 2008 were meantime heard most recently trading at a wide 140 bid, 145 offered level. Those bonds over the past year had sunk as low as 8 cents on the dollar and risen as high as 149.

Adelphia keeps dropping

Elsewhere in distressed bond dealings, a market source pegged Adelphia Communications as one of the day's losers, quoting the restructuring Greenwood Village, Colo.-based cabler's 10 7/8% notes due 2010 down a point at 92 bid, while its 10¼% notes due 2011 retreated to 94.5 from prior levels around 96.

However, a trader at another desk said that he had not seen any activity in Adelphia, and estimated them essentially little changed from the levels they had fallen to on Wednesday, with the 2011 101/4s at 94 bid, 96 offered, the 101/4s due 2006 at 90 bid, 92 offered, and its busted convertibles at 15 bid, 17 offered.

The first source also saw St. Louis-based cabler Charter Communications Inc. - not bankrupt like Adelphia but struggling to get out from under a suffocating $20 billion debt burden - as also lower, its 8 5/8% notes due 2009 down two points at 82, and its 9.92% notes due 2011 off more than a point at 81.5.

Airlines fall

Airline names were also lower amid published reports speculating that the industry may rack up $2 billion or more of cumulative losses for the fourth quarter due to sky-high fuel prices and a tough, competitive fare environment.

A trader saw industry leader AMR Corp.'s 9% notes due 2012 and 2016 down a point to 73 bid, 75 offered, while the 13% notes due 2009 and 12 1/8% notes due 2010 of bankrupt Indianapolis-based low-fare carrier ATA Airlines likewise slipped a point to 49 bid, 51 offered. Troubled Independence Air corporate parent FLYi's bonds were languishing in the mid 40s.

But he saw no real movement in the bonds of Delta Air Lines Inc.

At another desk, however, Delta's 8.30% notes due 2029 were quoted as having fallen as low as 40 bid from prior levels in the 44 range. Its 7.90% notes due 2009 were seen hanging around the same 55 range to which they had fallen on Wednesday from 56, while the Atlanta-based carrier's benchmark 7.70% notes due 2005 were unchanged at 90 bid.

Back on terra firma, a trader quoted restructuring auto components maker Intermet Corp's bonds as having fallen to 55 bid, 57 offered from prior levels at 59 bid, 61 offered, although he had seen no fresh news about the bankrupt Tory, Mich.-based automotive metal cast products maker. Its nearly worthless shares lost eight cents (21.62%) Thursday to close at 29 cents.

© 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.