Mirant up on asset sale talk, Doman also; Exide continues to firm

By Paul Deckelman and Sara Rosenberg

New York, Jan. 13 - Mirant Corp. bank debt and bonds were being quoted at firmer levels Tuesday on reports that the bankrupt energy operator's Philippine unit may raise capital by selling stock. Elsewhere, Exide Technologies Inc. bonds continued to firm, and Doman Industries Ltd. was also better.

Mirant's bank debt was one of the biggest movers in that market, with levels seen higher by about four or five points to end the day at 66.5 bid, 67.5 offered, according to a trader.

"There was news out about potential asset sales," the trader said in explanation of the rally.

On Tuesday, ABS-CBN news in the Philippines reported that Mirant Philippines Inc. expects to generate around 18 billion pesos, or approximately $325 million, from a planned initial public offering, although it is yet to be determined whether the IPO will be undertaken through the country's stock exchange or whether strategic investors will be able to buy some of the stocks.

Mirant "was a busy name, the big name of the day," said a trader in the bonds of distressed companies, who added that it was about the only name his shop was active in all day. He also cited the news report about the Philippine stock sale.

He quoted Mirant's busted 2½% convertible notes due 2021 as having opened the day at around 64 bid, 65 offered, then trading as high as 71 bid, 72 offering, before falling from those highs to end at about 66 bid, 68 offered - well off the highs but still up two points on the session.

At another desk, a trader saw Mirant's 7.90% notes due 2009 "up pretty strongly," trading in a 70-72 context, up three points on the session.

Another trader opined that 87-89 "is a good number" for most of Mirant's paper, including its 7 5/8% notes, its 8½% notes, and its 9 1/8% bonds due 2031.

A dissenting view came from a market source who saw some Mirant issues easier, such as its 8.30% notes due 2011, seen down about 1½ points at 86.5.

The source also saw Mirant's 7.40% notes nominally coming due later this year and its 7.90% notes due 2009 at around 71.5 bid, actually off several points from recent levels.

Doman up on sales hope

Elsewhere, the prospect of possible asset sales was seen pushing the battered bonds of bankrupt Canadian forest products company Doman Industries up.

A trader said that Doman's debt, such as its 8¾% notes due March 15, its 12% notes due July 1 and its 9¼% notes due 2007, had moved up to levels as high as 27 bid, 29 offered on Monday from prior levels in the teens, on rumors of possible asset sales by Doman, which is currently reorganizing under Canada's equivalent of the Bankruptcy Code, the Companies Creditors Arrangement Act.

Following that run-up, he said, the Doman bonds on Tuesday were being offered at 27 as investors "took some profits off of [Monday's] gains."

At another desk, however, the 8¾% notes were seen at 27 bid, up some eight points from recent levels.

"Those were up," agreed a market source who pegged the 83/4s and the 12s at 88.5 bid, up from 23.5 recently. He also saw Doman's 9¼% notes as having firmed to 23.5 bid on Monday from 20 previously, but said they were unseen in Tuesday's dealings.

Exide keeps rising

Exide Technologies Inc. - whose bonds have been steadily and substantially improving ever since a judge rejected the company's reorganization plan, setting the stage for bondholders to get more recovery - continued to climb on Tuesday.

A trader quoted the bankrupt Princeton, Ind.-based battery maker's 10% notes as having moved up to levels around 27 bid, 31 offered or 28 bid, 32 offered.

"[Monday] they were 26 bid, they were 18 bid, 21 offered a couple of days ago, and 3 [cents on the dollar] at the start of the year."

Another trader saw the bonds even better, quoting them as high as 29.5 bid, 31 offered.

Outside that trio of movers, bonds of distressed and bankrupt companies were generally little changed on a fairly quiet session. Crippled Italian dairy products maker Parmalat's dollar denominated 6 5/8% notes due 2008 continued to languish at 22 bid, 24 offered, while WorldCom remained in the mid-30s and WestPoint Stevens Inc.'s 7 7/8% notes due 2008 eroded by another half point to end at 8.5 bind.

One other feature was fellow textiles producer Dan River Inc.'s 12¾% notes, seen at 35.5 bid, 37 offered, up from 32 previously.

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