Adelphia continues to firm; Parmalat loses ground

By Paul Deckelman and Sara Rosenberg

New York, Jan. 27- Adelphia Communications Corp.'s bank debt and bonds continued to show strength pretty much across the board on Tuesday, although there was some suggestion that this was more due to market technicals than actual fundamental developments on the credit, which is expected to emerge from bankruptcy fairly soon.

Elsewhere, Parmalat Finanzaria SpA's bonds remained weak, as the report by its new auditors showed a much higher level of irregular outflows from the troubled company's coffers into other places than initially believed.

Much of Adelphia's bank debt was quoted Tuesday at 98- 99 levels after a roughly five-point runup over the past three weeks, according to a trader.

The Denver-based cable operator's TCI paper, which was said to be "leading the charge [since] it's the most liquid of the bunch," was seen trading in the 99 to 99 3/8 context on Tuesday, the trader said. The company's old Century paper was seen trading in a 99.25-to-99.375 context, while its Parnassos paper was seen at 98.5 bid, 99.5 offered.

"Every flavor of Adelphia is up," the trader said. "It's more market technicals than credit technicals."

On the bond side of the ledger, meantime, Adelphia's notes - which had eased a bit on Monday on apparent profit-taking on their recent run-up - were once again firmer; a trader said that its "better claim" paper was trading in the 105.5 area, while its lower claim paper was around 100.5 bid, 101 offered.

At another desk, Adelphia's 9 7/8% notes due 2007 were seen firmer at 101.5 bid.

Parmalat down

Elsewhere, Parmalat's bonds dipped to 11 bid, 12 offered from prior levels around 12 bid, 14 offered, a distressed-debt trader said.

The bad news continues to mount for the stumbling Italian dairy products giant, which filed for the Italian equivalent of bankruptcy in December after it was revealed that massive amounts of money thought to be in its coffers - weren't.

Reuters reported on Tuesday that irregular money transfers out of the Parmalat group totaled €2.5 billion between 1999 and 2003, according to a report by PricewaterhouseCoopers, which is scrutinizing the company's books at the request of the courts.

The report said that transfers were apparently used to finance "noncommercial activity" as well as companies and people linked to the group. Italian authorities are currently grilling company founder and ousted chairman Calisto Tanzi, who has admitted diverting at least €500 million of Parmalat money to enterprises controlled by his family.

Solutia Inc.'s bonds were "down three or four points" a trader said, quoting the bankrupt St. Louis-based chemicals maker's 11¼% notes as having fallen to 93 bid, 95 offered from 96 bid, 98 offered previously, while its subordinated bonds dipped to 45 bid, 47 offered from 48 bid, 49 offered.

He said there was no fresh news out on the company, "just sellers out there."

Meanwhile, Solutia.'s debtor-in-possession facility hasn't really traded since hitting the secondary, with levels remaining at par ½ bid, 101 offered, according to a bank debt trader.

© 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.