Adelphia bank debt continues to rally in secondary; Charter follows suit

By Sara Rosenberg and Carlise Newman

New York, March 10 - Adelphia Communications Corp. was active on Monday, with the company's bank debt moving up across the board. In response to the cable improvement, Charter Communications Inc.'s bank debt grabbed on to Adelphia's momentum, moving up by about a point during market hours.

The "old" Century term loan debt was bid at 72/74 offered, up from 70 bid/72 offered on Friday, and the Century term loan "new" debt was seen bid at 70/72 offered. The revolver was seen at 70 bid/72 offered after Friday's price of 68 bid/70 offered, according to a trader.

"Adelphia was very active and had interest across the board, in all tranches," said the trader.

The Coudersport, Pa. cable company's bank paper began its northward movement last week, with some attributing the gains to market participants becoming more comfortable with co-borrower issues that the long-troubled company has been facing.

Further influencing the bank debt was the recent announcement that the Bankruptcy Court approved the company's employment agreements with William T. Schleyer, chairman of the board of directors and chief executive officer and Ron Cooper, president and chief operating officer.

Charter Communications' bank debt traded at 85 7/8 on Monday, up about a point from Friday's levels, according to traders.

According to one trader, the activity seen in the St. Louis cable company's loan was due to a "general cable improvement".

"Adelphia is up so Charter will follow suit with that," the trader added.

A second trader simply attributed the new levels of both Charter and Adelphia to "foolishness in the cable sector".

Bank loan traders said Global Crossing's paper held on to levels from last week, at 18 bid/19 offered. Global Crossing announced Monday it had filed a special committee report with the bankruptcy court, releasing information about the troubled company's accounting practices.

Global Crossing created the special committee after a former employee, Roy Olofson, alleged that the company entered into fraudulent business deals to raise its revenues and meet Wall Street expectations. The company failed to disclosed Olofson's allegations to its shareholders and public auditors, and filed for bankruptcy about five months later.

In addition, the official committee for Global Crossing's unsecured creditors on Monday reaffirmed their support for a sale of the company to two Asian companies, saying it gives the creditors the best means to recoup some of their losses. A majority of the company is slated to be sold to Hutchison Whampoa Ltd. unit Hutchison Telecommunications and government-run Singapore Technologies Telemedia. The deal has been confirmed by the bankruptcy court but awaits regulatory approval by the Committee on Foreign Investment in the United States.

But on Feb. 25, long-distance telecommunications company IDT Corp. announced it would launch a rival bid for the assets of the company, saying national security could be compromised by the current plan for investors in Hong Kong and Singapore to take over the fiber-optic carrier.

In follow-up news, Bresnan Broadband Holdings LLC's $225 million 71/2-year term loan B was flexed up last week to Libor plus 425 basis points from Libor plus 375 basis points, according to market sources.

In addition to the term loan B, the facility also contains a $100 million seven-year revolver and a $75 million seven-year delayed draw term loan A.

JPMorgan Chase, TD Securities and Wachovia are the lead banks on the facility that will be used to help fund the acquisition of Comcast Corp.'s cable television systems.

Bresnan is a White Plains, N.Y. broadband communications provider.

Pinnacle Entertainment Inc.'s $225 million credit facility (B+) has received a handful of commitments since its launch on Thursday, according to a company spokesman. "I believe there are four or five on hand on the term loan," he said, adding that he did not currently know the size of the commitments.

The loan consists of a $100 million four-year revolver with price talk of Libor plus 425 basis points and a $125 million five-year term loan with price talk of Libor plus 425 to 450 basis points.

Bank of America and Bear Stearns are the lead banks on this deal, which will be used to help fund the Lake Charles, La. project, replace the company's existing revolver and for general corporate purposes.

The Las Vegas diversified gaming company is currently targeting the early half of April to close on the new credit facility, according to a company spokesman.

When asked why the company opted to use bank debt instead of other financing alternatives, the spokesman responded: "We have $475 million of bonds outstanding. There's plenty of subordinated debt in the capital structure. We're layering in the senior debt."

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