Another down day for Collins & Aikman; Dura bonds stage comeback

By Paul Deckelman and Sara Rosenberg

New York, Aug. 8 - Collins & Aikman Corp.'s bank debt dropped by yet another point during Tuesday's market hours - on top of the 4 point slide seen on Monday, traders said.

The bankrupt Troy, Mich.-based automotive interior components maker's debt was seen by a trader in distressed loan paper to have eased a point, closing out the day with levels of 68 bid, 70 offered.

It was a continuation of the negative trend seen on Monday, when the bank debt had dropped 4 points to 69 bid, 71 offered from Friday's closing levels of 73 bid, 75 offered.

The company's 10¾% senior notes due 2011 meantime were also once again on the downside, with a trader seeing those bonds ½ point lower at 13.5 bid, 14.5 offered.

That's less than half the level that the bonds held about a month ago, when there was widespread speculation that firm bids for the company's domestic assets - it had already sold its European operations - might appear. When those rumored bids did not surface, the bonds and the bank paper began their retreat.

Collins & Aikman's subordinated 12 7/8% notes due 2012 meantime hover just above the zero mark, at around a penny or two on the dollar.

Among other troubled automotive suppliers, traders saw virtually no price impact from the news that General Motors Corp. had filed a multi-billion-dollar claim against its bankrupt former subsidiary, Delphi Corp.

A trader saw Troy, Mich.-parts supplier Delphi's 6½% notes due 2009 at 83.75 bid, 84.75 offered and its 7 1/8% notes due 2029 at 77,5 bid, 78.5 offered, both unchanged on the day. He saw GM's benchmark 8 3/8% notes due 2033 perhaps ¼ point higher at 82.5 bid, 83 offered, while the carmaker's General Motors Acceptance Corp. financing unit's 8% notes due 2031 were likewise up ¼ point at 99.25 bid, 99.75 offered.

Delphi disclosed the existence of the GM claim in a filing before the U.S. Bankruptcy Court for the Southern District of New York, which is overseeing its reorganization. It gave no information as to the size of the GM claim.

Among other bankrupt auto parts manufacturers, a trader saw Toledo, Ohio-based Dana Corp.'s 6½% notes due 2008 up ¾ point at 83.5 bid, 84.5 offered, while two other Dana issues were unchanged - its 5.85% notes due 2015 at 73.5 bid, 74.5 offered, and its 7 1/8% notes due 2028 at 76.75 bid, 77.75 offered.

He did see the 8 3/8% notes due 2007 of Dana Credit Corp., Dana's financial arm, up a point on the session at 91.5 bid, 92 offered. Those bonds were volatile last week, zooming more than 10 points to around the 90 bid area on the news that the company and its bondholders were in forbearance talks aimed at giving the company a freer hand as it tires to restructure itself.

Bankrupt Novi, Mich.-based vehicular frames maker Tower Automotive Inc.'s 12% notes due 2013 were unchanged at 54.5 bid, 55.25 offered.

Dura bounces back

Among the non-bankrupt names in the troubled sector, Dura Operating's recently badly battered 9% notes due 2009 "had a decent rebound," a trader said, quoting the Rochester Hills, Mich.-based systems maker's bonds up 4 points on the day at 26 bid, 27 offered.

"There was no news out on them," he said, acknowledging that the bonds had been badly oversold late last month after Dura reported an unexpected plunge into the red in the most recent quarter, versus a year-ago profit.

Remy gains on earnings

Anderson Ind.-based automotive starter and alternator manufacturer Remy International Inc.'s 11% notes due 2009 were seen up as much as 4 points on the session at 65 bid, 67 offered, while its 8 5/8% senior notes due 2008 were up 1½ points at 94.5 bid, 95.5 offered.

Remy reported operating income of $12.9 million in the second quarter compared with an operating loss of $3.1 million in the 2005 second quarter. Its net loss for the quarter decreased by $11.1 million to $10.3 million, versus a $21.4 million net loss reported in the corresponding period last year. Net sales for the second quarter set an all-time record, increasing by $59.8 million to $372.2 million, a 19.2% increase from $312.3 million reported in the corresponding period last year.

Charter ends little moved

Outside of the automotive area, Charter Communications Inc.'s bonds showed some volatility before ending pretty much unchanged, traders said.

One trader saw the bonds "pretty active," quoting the company's "go go" issue, the 8 3/8% notes due 2014 off ¼ point at 100.75 bid, 101.25 offered, while seeing its 8 5/8% notes due 2009 down ½ point at 83.5 bid. 85.5 offered.

Another trader, however saw Charter bonds firm about ½ point, its 8¾% notes due 2013 ending at 99.5 bid, par offered and its 11 1/8% notes due 2014 at 66 bid, 68 offered.

Yet another trader saw the St. Louis-based cable operator's bonds "up a bit" in the early going, "starting strong" but then "giving back those gains" to finish mostly unchanged. Charter's 8 5/8% notes due 2009 got as good as 84.5 bid, 85.5 offered, before falling back to end unchanged at 83.5 bid, 84.5 offered.

Charter's 10% notes due 2011 were seen having gotten as good as 71 bid in the early going - but by the day's end, the trader said, they had fallen back to 68 bid, 69 offered, pretty much unchanged.

Charter - weighed down with more than $19 billion of debt on its balance sheet - reported a wider second-quarter loss from a year ago, but said that it was continuing to execute on its stated strategic priorities, one of which involves continuing what company president and chief executive officer Neil Smit said was "our opportunistic approach to improve liquidity, extend [debt] maturities and deleverage the balance sheet" (see related story elsewhere in this issue).

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