AMR paper thinly traded but higher on news of U.S. Airways-union accord; Travelport gains

By Stephanie N. Rotondo

Portland, Ore., April 20 - It was a mostly up day for distressed debt, traders reported Friday, though the focus remained on higher-quality credits.

"It was a quiet day," a trader said.

Even AMR Corp. was subdued, albeit trading a little higher on news U.S. Airways had struck a deal with the bankrupt airline's largest unions and that said unions in turn are supporting a potential takeover bid.

Meanwhile, Travelport LLC paper was rising, though on no fresh news. Similarly, Edison International Inc.'s debt was down, also on no fresh news.

AMR better on U.S. Airways news

There was "very little trading" in AMR debt Friday, despite word that the company's largest unions had struck a deal with U.S. Airways, which is reportedly planning to make a takeover offer for the bankrupt airline.

Still, paper was "a little better," a trader said.

He saw the benchmark 6¼% convertible notes due 2014 "up a few a points" at 491/2. The 6.977% 2001-A EETCs got "as good as" 91 bid, 92 offered, he added.

Under the deal with U.S. Airways, 6,200 of the 14,200 union jobs planned to be cut could be saved.

The brouhaha comes ahead of a hearing next week in which AMR will ask a bankruptcy judge to allow it to void union contracts.

Gimme Credit LLC analyst Vicki Bryan, however, was not too effusive about a U.S. Airways/AMR merger, especially given that U.S. Airways has not yet integrated union agreements of its own stemming from its merger with America West in 2005. Bryan also noted that U.S. Airways would have a hard time following through on promises made to the unions due to its below-average operating margins.

"U.S. Airways can't fix AMR's problems by promising the moon to AMR's unions - but it potentially can make a big mess even bigger if it actually can get this deal done," she wrote in an afternoon commentary.

AMR is based in Fort Worth, Texas.

Travelport gains

A trader said Travelport's 9 7/8% notes due 2014 were up a deuce at 641/2.

Another trader echoed that level.

However, there was no news out on the Atlanta-based travel services provider to act as catalyst.

Edison debt drops

Edison International's bonds were dipping on Friday, according to one trader.

He called the 7% notes due 2017 down 3 points to 59, while the 7 5/8% notes due 2027 dropped three-quarters of a point to 593/4. The 7¾% notes due 2016 fell half a point to 65.

But another trader said the 7% notes were up half a point to 62 bid, 621/2.

Like Travelport, there was no fresh news out on the Rosemead, Calif.-based power producer to cause the move.

Exide up, Sprint down

In the rest of the distressed sphere, a trader said Exide Technologies Inc.'s 8 5/8% notes due 2018 were up "almost 3 [points]" to 811/2.

The trader also saw Sprint Nextel Corp.'s 6 7/8% notes due 2028 down a point at 741/2.

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