Winn-Dixie bonds firmer; Adelphia Communications bonds up

By Paul Deckelman

New York, Feb. 18 - Winn-Dixie Stores Inc. notes continued to hover in the upper 50s on Friday, well off the lows that the troubled Jacksonville, Fla.-based supermarket operator's bonds had hit earlier in the week when it disclosed an accounting error - the latest event to shake investor confidence in the company. Several traders dismissed the uptrend in the problem-plagued company's bonds as little more than an atypical blip.

Elsewhere, the bonds of Adelphia Communications Corp. were being quoted higher, although there was no fresh news seen out on the bankrupt Greenwood Village, Colo.-based cable system operator.

Winn-Dixie's 8 5/8% notes due 2008 - which had tumbled as far down as intraday lows of 51 bid, 52 offered earlier in the week with the accounting problem disclosure - were "feeling better," a trader in distressed issues said, quoting them at 58 bid, up two points from where he had seen them close Thursday.

He also saw the company's pass-through bonds, secured by some of its store real estate, were trading around 70 bid.

Another trader noted that the latter issues - its 7.803% notes due 2017 and 8.181% notes due 2024 - had both moved up three points on the session, to 69 bid, 70 offered. He said that the fact that the investors were suddenly lifting the secured paper signaled to him that "bankruptcy is imminent."

He said that at his shop, "we were expecting it [a Chapter 11 filing] today."

He was not the only one.

A trader at another desk said that for Winn Dixie, which for about a year now has been closing underperforming stores or those located outside its geographic areas in the southeastern United States but which still has expenses related to those store leases, "the only way out is to do the draconian thing, from a shareholders' standpoint, and file it, and then be able to literally clean the company up, and get a fresh start."

Adelphia bonds rise

Elsewhere, there was no immediate explanation seen for Friday's rise in the bonds of Adelphia Communications - but rise they did.

A trader quoted Adelphia's 10¼% notes due 2006 and 10¼% notes due 2011 "moving up a point or two" to 87 bid and 92 bid, respectively.

At another desk, Adelphia's 9 7/8% notes due 2007 were quoted up more than a point on the session, to 87 bid, while the 8 7/8% notes of Adelphia's subsidiary, Century Communications Corp., were seen a quarter-point better, at 102.5 bid.

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