Collins & Aikman sees slight gains; Calpine still rising; Federal-Mogul better

By Carlise Newman

Chicago, Nov. 7 - Collins & Aikman Corp. paper was slightly better Friday after being slammed Thursday when it confirmed that it would not supply interior trim for future DaimlerChrysler AG midsize sedans.

The 10¾% senior notes were up ½ point to 83 bid, 85 offered, after dropping about 2 points Thursday. The bonds were at levels near 84 bid, 86 offered at the beginning of the week.

"Not much of a move, but it shows people have confidence that they can get over this," a trader said.

Collins & Aikman said in a news release Thursday that the Chrysler D-segment business did not meet higher hurdles for returns on investment that it adopted after obtaining the interior trim contract in April. The company said the business would not produce revenue until mid-2006 or later, while requiring an initial investment of more than $50 million plus significant price givebacks on current business.

Collins & Aikman added that it has accommodated Chrysler's effort to transition the D-Segment to another supplier.

News reports a few weeks back had said Chrysler was considering dropping the company as a supplier.

Elsewhere, Calpine Corp. paper continued to rise after the company posted a profit Wednesday for the third quarter. In addition, on Thursday, the company announced two separate note offerings totaling $1 billion. Calpine will use proceeds to pay down debt.

The San Jose, Calif. company priced $600 million of senior unsecured convertible notes due 2023 and $400 million of second-priority senior secured notes.

Calpine's 8½% notes due 2011 were up 1 point on the session to 74½ bid, 75½ offered, according to a trader.

"It was kind of slow today. We saw things trade that have been moving all week, just the same stuff," he said.

On Wednesday Calpine said net income jumped to $237.8 million, or 51 cents a share, from $151.1 million, or 34 cents, in the year-ago quarter.

Federal-Mogul Corp. bonds were "firmer than they had been in recent weeks," a trader said.

The 7½% notes due 2009 were quoted at 19½ bid, 20½ offered, up 1½ points.

On Monday Federal-Mogul said it reached an agreement on a reorganization plan with its unsecured creditors committee.

The agreement also includes the asbestos claimants committee, the future asbestos claimants representative, the agent for the prepetition bank lenders and the equity committee. The plan will be filed in the U.S. Bankruptcy Court, District of Delaware.

The agreement on the amended plan is consistent with the principal terms of the plan filed in March 2003.

"Under the amended plan, Federal-Mogul will emerge with an appropriate capital structure and protected from asbestos liability by a permanent channeling injunction, and will continue to be a leading original equipment and aftermarket global automotive supplier," said Chip McClure, chief executive officer and president, in a news release

Elsewhere, WorldCom Inc. again was barely changed a few days after obtaining court confirmation for its reorganization plan.

WorldCom was ¼ point higher at 38¼ bid, according to a trader. The bonds rose 2 points last Friday in anticipation that the plan would be approved, and rose about 4 points so far throughout this week. They began to slow down during Wednesday's session with a rise of only ¼ point.

In other news, International Wire Group's 11¾% notes due 2005 were up 7 points to 56 bid. The notes had lost 4 points both Wednesday and Thursday, but traders had no idea for the behavior of the St Louis-based wire manufacturer's paper.

"It's not like it's a widely traded name or even in the news much, so it's just kind of baffling," one trader said.

And WestPoint Stevens Inc.'s 7 7/8% notes due 2008 were up ½ point to 11½ bid. The WestPoint, Ga.-based home fashions manufacturer's bonds have been fluctuating this week, down 2 points Wednesday and 1 point Thursday, and up Friday.

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