Federal Mogul bank debt holds at lower levels; Fibermark lower

By Paul Deckelman and Sara Rosenberg

New York, March 22 - Federal-Mogul Corp.'s distressed bank debt held steady at around 88.5 bid, 89 offered on Monday, after having traded down to those levels on Friday from 90 bid, 91 offered.

Among generally quiet trading in bonds, Fibermark Corp. notes were quoted as having fallen into the 40s from prior levels in the 50s, although no news was seen.

Federal Mogul's loan "traded down last week without any fundamental news," a trader said. "Auto equities were down. And, there are always lingering questions if Carl Icahn will create problems at the end of the day," he explained.

Earlier this month, Federal-Mogul filed its first amended reorganization plan, which was developed by the company, the unsecured creditors committee and the asbestos claimants committee.

It also has the support of High River LP, which is affiliated with billionaire investor Carl Icahn, who is a creditor and a shareholder.

Under the plan, holders of note claims and personal injury claims on account of asbestos exposure will receive the common stock of the reorganized company. Administrative claimants will recover 100% of their claims as will priority tax claims, priority claims against U.S. debtors, priority claims and preferential liabilities against United Kingdom debtors, secured claims, environmental claims, non-priority employee benefit claims, bonded claims and affiliate claims against U.K. debtors other than Federal-Mogul United Kingdom Ltd. and equity interests in the subsidiaries.

To repay its pre-petition bank lenders, which have nearly $2 billion in claims, the Southfield, Mich. auto parts manufacturer - in bankruptcy since October, 2001 - will get a secured term loan agreement of $1.305 billion and issue $300 million of junior payment-in-kind notes with an 11-year maturity.

A hearing on the disclosure statement is scheduled for April 13-14.

Calpine loan/note trades

Elsewhere on the distressed bank-debt front, Calpine Generating Co. LLC's $835 million five-year first lien term loan/note was said to trade actively on Monday, with the paper quoted late in the day at 100.25 bid, 100.5 offered, according to a trader.

The paper opened at 100.125 bid on Monday morning and progressed to be better bid as the day went on, a second trader added.

By comparison, though, the $740 million six-year second lien floating-rate loan/note saw "very little activity" on Monday, with the paper quoted around 96.5, according to the first trader.

"If guys wanted yield on this they would have gone to the third lien instead of the second lien," the second trader said in explanation of why the second lien has not been trading as actively as the first or third lien paper. "I think a large enough portion [of the second lien is being held by the agent] that there's better sellers than buyers," he added.

CalGen is a subsidiary of San Jose, Calif., power generator Calpine Corp.

Fibermark bonds lower

Back among the bond investors, a trader in distressed bonds quoted Fibermark's 10¾% notes due 2011 as having traded down to levels as low as 46 bid from previous levels at 55 bid, 57 offered, but said that he saw no reason for that to happen, with no news out on the paper products manufacturer.

He said Fibermark's other issue, its 9 3/8% notes due 2006, was also quoted at those lower levels, though on no news.

Weirton gains

Elsewhere, the trader said that Weirton Steel's bonds were "a little better," quoting them at around 45 bid from prior levels in the lower 40s.

The Weirton, W.Va.-based steel company's bonds - which had traded as high as around 60 bid in recent weeks and as low as the 20s, fluctuating in response to plans by Wilbur Ross's International Steel Group Inc. to buy the company but only give bondholders around 20 cents on the dollar - had last week pushed up into the lower 40s as noteholders speculated that a better bid for the company might come along - perhaps from a group of senior bondholders putting their own offer together.

A trader said Winn Dixie Stores Inc.'s 8 7/8% notes, recently heard at 86.25 bid, 87 offered, were seen around 87.25 bid, 88.25 offered on Monday. There was no fresh news out on the troubled Jacksonville, Fla. -based supermarket, however, traders said.

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