Adelphia bank debt, bonds, seen higher; Telewest gains on NTL deal

By Paul Deckelman and Sara Rosenberg

New York, April 2 - Adelphia Communications Corp.'s bonds and bank debt were seen higher on Friday although no fresh news was seen out on the bankrupt Greenwood, Village, Colo.-based cable operator. Elsewhere U.K cable operator Telewest Communications plc's bonds were seen having gotten a lift out of the successful new junk bond deal brought by NTL Cable plc, a rival UK cabler sometimes mentioned as a possible buyer for the embattled Telewest.

NTL successfully sold a three-tranche, multi-currency offering worth the equivalent of £811 million (just under $1.5 billion) and several traders said that the this gave Telewest's 11% notes due 2007 a lift to 66 bid from 64.5 previously, and likewise lifted its 9 5/8% notes due 2006.

They say that using the bond deal proceeds and those of its new £2.4 billion bank credit line NTL might look to acquire its underperforming rival.

"That would be good," a trader said, of a possible NTL-Telewest combination.

Also on the cable front, domestic cabler Adelphi's Century bank debt was seen as pretty active on Friday, with a trader quoting the New Century paper in the mid-95 area, the Old Century paper trading in the low 96 area and the revolver trading at 95 and change.

By late day, the New Century was quoted at 95.5 bid, 96 offered, slightly higher from Thursday's level of 95 bid, 95.5 offered. The Old Century was quoted at 96.25 bid, 96.75 offered, maybe a touch higher from Thursday's bid of 96, while the revolver was quoted at 95 bid, 95.5 offered, the trader said.

Among the bond investors, Adelphia's 10 7/8% notes due 2010 were unchanged at 98.5 bid, although its Century 8¾% notes due 2007 pushed up to 104 bid from prior levels at 102.5. Century's 8 7/8% notes due 2007 were a point better at 105.5.

Huntsman Corp.'s bank debt was also active, with the paper seen trading in the low 98's, up about "a point or so over the last couple of days", according to a trader.

Earlier in the week, the Salt Lake City chemical company filed its annual report with the Securities and Exchange Commission, which showed an increase in adjusted EBITDA to $58.2 million in the fourth quarter of 2003 versus $31.8 million for the same period in 2002. Also in the quarter, revenue increased to $802.1 million, compared with $696.6 million in 2002.

Huntsman's 9 7/8% notes due 2009 lost half a point to 109.5 bid.

Haynes higher

A trader in distressed bonds said that Haynes International Inc.'s 11 5/8% notes scheduled to mature in September traded up to 65.5 bid, 66.5 offered, trading flat, or without accrued interest. That's up from recent levels as low as 61 bid, 63 offered, following the Kokomo, Inc.-based metal alloys producer's Chapter 11 filing earlier in the week.

He saw Dan River Inc.'s 12¾% notes due 2009 unchanged around 25.5 bid, 26.5 offered; the Danville, Va.-based textile maker also filed for Chapter 11 protection this past week.

aaiPharma Inc.'s 11% notes due 2010, which had been gyrating as low as 74 bid during the week, as the Wilmington, N.C. -based pharmaceuticals maker said it would not be able to file its 10-K annual report with the SEC by its extended March 30 deadline, were seen Friday at 90 bid, the level to which they had rebounded Thursday after the company announced that it had lined up some badly needed short-term liquidity through a $40 million credit revolver to be provided by Bank of America.

Back among the bank debt traders, Calpine Generating Co. LLC's second lien term loan was trading in the high 95's on Friday and ended the day quoted at 95.5 bid, 96 offered, up a half a point from Thursday's levels in the San Jose, Calif., power generator's paper.

A trader said there were really no specific reasons behind some of the higher trading levels in these names but rather it seemed to be driven more by technicals.

"Floating paper is feeling a little better," the trader said. "Markets are feeling a little better with the employment number. The high yield market got hit hard. When interest rates are backing up, people become more interested in floating-rate paper than fixed rate."

On Friday, employment numbers were released showing an increase in non-farm payrolls of 308,000 in March and a slightly higher unemployment rate of 5.7%, according to the Bureau of Labor Statistics of the U.S. Department of Labor.

A trader in distressed bonds, noting the Labor Department figure, dismissed them, noting that it will be just as likely that they will be revised downward next month.

Anyway, he opined, "to us, none of that stuff really matters. Maybe people who trader higher grade junk bonds watch Treasuries and take their cues from them. But here in distressed you're just buying assets."

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