Airlines seen as most active during quiet short week; Iridium bonds lose power

By Stephanie N. Rotondo

Portland, Ore., April 4 - Wednesday proved to be as quiet as the rest of the holiday week has been, traders said, with many market participants out of the office for Spring Break, Passover or the upcoming Easter holiday.

"There are not a lot of markets going on out there," one market source said.

Distressed airline paper seemed to be the most active, a trader said. Northwest Airlines Corp., which has set a date for its confirmation hearing, saw early morning gains but gave some of them back by the close, the trader said. Still, he said the bonds were up from the previous day.

Delta Air Lines Inc.'s bonds, however, got weaker, the trader said. He attributed the loss to more claims coming out against the bankrupt airline. The company is slated to exit bankruptcy on April 30.

Meanwhile, Iridium LLC's bonds lost power after Tuesday buzz caused a surge in the company's bonds. The buzz generated rumors of a potential settlement with its former parent company, but the trader was not buying the talk.

As Wednesday brought losses in Iridium's notes, the trader said it was expected.

Separately, Hines Horticulture Inc. was looking for a bid on its bonds, but a market source wondered if the offer was "too high."

Looking to Thursday, market players were expecting most market professionals to be out of the office early ahead of the three-day weekend.

"It will be a half day's worth of business at best," a source said. "Hopefully, we'll try to get some work done in the morning, so we can leave for the three-day weekend with a smile on our faces."

Northwest bonds up

Northwest Airlines' bonds started the morning off strongly, but gave some of their gains back by the end of the trading day, a trader said.

Still, the trader pegged Northwest Airlines' 10% notes due 2009 up from the previous day at 86.75 bid, 87.75 offered.

The bankruptcy court overseeing the distressed airline's case approved the adequacy of the information included in the company's disclosure statement, allowing the company to solicit votes on its amended reorganization plan.

The voting deadline is slated for May 7, with a confirmation hearing planned for May 16.

Delta loses steam

In other distressed airline paper, Delta lost altitude, according to a trader, who said "a fair amount of claims" are still coming out.

The trader quoted Delta's 8.3% notes due 2029 at 57 bid, 57.75 offered, down from the previous day's levels of 57.75 bid, 58.25 offered.

The Atlanta-based airline posted a record load factor for March, showing a 2.5% increase over the same month the previous year. Consolidated system load factors hit 83%, with a daily all-time record of 98.1% on March 31 - coinciding with Spring Break traveling.

Iridium bonds fall

As one trader expected, Iridium's Tuesday gains in its bonds fell a bit during Wednesday trading.

The trader said the company's notes, which tend to trade evenly, lost 1.5 points to close at 22.75 bid, 23.75 offered.

The satellite communications provider's bonds had risen due to buzz that the company had reached a settlement with its former parent company, Motorola Inc. But the trader did not see that rumor proving to be true.

"It didn't really make much sense," he said.

The company has been involved in a lawsuit with Motorola since filing for bankruptcy in 1999. The company has said it believes continued control exerted by Motorola led to the demise of the business.

Hines Horticulture looking for bid

Hines Horticulture's 10¼% notes due 2011 saw a market of 81 offered but could not catch a bid, a market source said.

The source said he had seen the bonds at 80 offered the previous day but with very little volume.

"Maybe it's too high," he said.

The company delayed posting its fourth-quarter earnings last week, which prompted several days of losses. The company told Prospect News on Wednesday that "it has not been determined" when the results will be released.

Broad market slides

Hollywood, Fla.-based Technical Olympic USA Inc. saw yet another day of losses as its bonds continue to slip.

The 10 3/8% notes due 2012 were seen a half point lower at 73, a market source said. He noted there was not a lot of trading volume, however.

Tembec Inc.'s 8½% notes due 2011 closed at 62 bid, 63 offered, the source said. The bonds have been gyrating on the strength of the Canadian dollar.

Meanwhile, Primus Telecommunications Group Inc.'s 8% notes due 2014 were seen trading at 74. The company announced last week that it had issued $51 million in 14¼% second-lien notes due 2011 for cash, a move aimed at improving the company's liquidity.

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