Exide bounces around on creditor accord; Reliant active on asset sale, bond deal talk

By Paul Deckelman and Sara Rosenberg

New York, Jan. 23- Exide Technologies Inc. bonds were gyrating after the troubled Princeton, N.J.-based storage battery maker said that it had reached agreement with creditors on a reorganization plan to replace an earlier scheme nixed by the bankruptcy court. Elsewhere, Reliant Resources Inc. bank debt was moving around once again, still trading actively on potential asset sales and a rumored bond deal, while Adelphia Communications Corp. bonds continued to gain.

A trader saw Exide's 11% notes all over the map following the company's announcement, first plunging to as low as 22 bid, 24 offered from prior levels around 30 bid, 31 offered. By the end of the session, however, the bonds had recovered most of their lost ground, closing out at 28 bid, 30 offered.

Exide's bonds had been trading as low as two cents on the dollar just before the end of 2003, but then got a solid boost that took them as high as 30 bid in the days and weeks following a Dec. 31 ruling by the Wilmington, Del. bankruptcy judge overseeing its reorganization, Kevin Carey, who refused to confirm the company's plan of reorganization, instead declaring that Exide has a higher enterprise value than that proposed in the plan and therefore, greater value should be available for distribution to the company's unsecured creditors.

The plan rejected by the judge had put the company's enterprise value at $950 million to $1.05 billion, but the Carey said the company's value was somewhere in a range of $1.4 billion to $1.6 billion, more in line with the estimates by the company's creditors of $1.48 billion to $1.71 billion. Carey directed the company to work with its creditors on a new plan and report back to him by Jan. 22.

Exide said late Thursday that it had indeed reached agreement on the principal terms of a consensual plan of reorganization with the steering committee of pre-petition secured lenders and the official unsecured creditors' committee. Details of the plan were not publicized.

The company said that it would work with the two committees to finalize all terms of the plan and then submit it to the court and all of the creditors as soon as possible. The secured lenders' committee and the unsecured creditors have each indicated that they will be co-proponents of the plan when it is filed, Exide said.

Adelphia firms

Meanwhile, indications that Adelphia Communications will be emerging from bankruptcy sometime soon have helped push up the bonds and bank debt of the Denver-based cable television systems operator.

"Adelphia keeps on trading up," a trader said, "even though the stock was down a little [Friday]. The bonds were all up a couple of points, and the preferred and the converts were up."

He quoted Adelphia's 10¼% notes as having firmed to bid levels around 97-98 on market buzz that the company will soon be out of bankruptcy.

"That's what people are speculating, and it must look good for them," the trader said.

At another desk, Adelphia's 9 5/8% notes due 2007 were seen up more than a point on the day at 99.5.

A market source quoted the company's 9 7/8% and 10 7/8% notes both bid around 99-100, agreeing that "they've moved up in the last few days."

Convertibles market sources said that Adelphia's convertible debt jumped after a big buyer - unidentified - had stepped in. Adelphia's converts were heard to have zoomed 10.5 points, with the 2006 paper going to 70 bid from 60 previously, a trader said, and the company's perpetual preferred shares did even better, up 16. The two mandatory issues were meantime a point or more better.

"The preferred, [Thursday] you could have bought it at 31/2, [Friday] it was at 6," the trader said.

Reliant aided by asset sales, bond talk

A bank debt trader said that news that Reliant Resources was putting some New York assets up for sale, and scuttlebutt that it might bring a new bond deal to market has some investors thinking that a pay down of existing bank debt may not be too far away.

The paper traded at both the 98.625 and 98.75 levels, and continued to remain in that context by late day, the trader said.

On Thursday, about $30 million of Reliant's bank paper traded on the Street right around 98.625, according to a second trader, who placed the debt in a 98.25 bid, 99 offered context on Wednesday.

As previously reported, Houston-based Reliant is said to be seeking bids for its New York state power plants, including two in New York City itself and several others upstate.

Reliant's 9¼% notes due 2010 and its 9½% notes due 2013 - which had both moved up about a point-and-a-half Thursday on the news that Reliant was shopping the New York power plants around - were seen unchanged Friday around those same levels at 111.5 bid and 112.5, respectively.

Mirant bank debt dips

Meanwhile, Mirant Corp. bank debt was slightly lower on Friday as the offer side moved down to Thursday's bid side level. A trader said the Atlanta-based energy company's paper was quoted at 66 offered by late day with no bid seen, versus Thursday's quotes of 66 bid, 67 offered.

On the bond side, Mirant "was just sitting there - I didn't see any change," a trader said, pegging its 7.40% and 7.90% notes at 71 bid, 72 offered and its 2½% busted converts at 68 bid, 69 offered. The Mirant Americas Generating 7 5/8% notes due 2006 were at 87 bid, 88 offered.

A trader saw Dan River Inc.'s 12¾% notes due 2009 at 32.5 bid, 34 offered, down from 36 bid, 37 offered previously.

Parmalat Finanzaria SpA's bonds - including its 6 5/8% dollar-denominated 2008 notes - were being quoted at 18 bid, 19 offered, well down from prior levels in the lower 20s.

(Ronda Fears contributed to this article.)

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.