Reliant, Adelphia bank debt draws interest, though bond action quiet

By Paul Deckelman and Sara Rosenberg

New York, Jan. 28- On the distressed bank debt side, it was once again Reliant Resources Inc. and Adelphia Communications Corp. that caught traders' attention Wednesday, traders said.

Bond traders, however, noted little activity in either credit - and generally distressed dealings seemed to take a back seat to the big story of the day in the junk bond market - the sharp retreat of Tenet Health Care Corp. after it announced plans to sell, and of its hospitals and take a big restructuring charge.

Bank debt traders said that there was some activity in Adelphia and in Reliant paper taking place in the names in the morning prior to an afternoon slowdown.

Houston-based energy operator Reliant Resources traded around in a 98.75 bid, 99.25 offered context - active, though basically unchanged from previous levels, according to a trader.

Meanwhile, Adelphia's old and new Century paper seemed to be converging a little bit, traders said, with the new Century debt trading in a 99 bid, 99.75 offered context, up from around 98.5 bid, 99.5 offered on Tuesday. At the same time, the old Century paper was trading around 99 bid, par offered, unchanged on the day, according to the trader.

Denver-based cable operator Adelphia, currently in bankruptcy, is expected to emerge before long, and its bank debt has converged accordingly and its bonds have moved up in those time, market-watchers say.

"Everything is just so close to par, it doesn't seem to matter," the trader said in explanation of why the old and new Century are now trading at similar levels.

Also seen trading on Wednesday was the Adelphia Century revolver in the 97.5 bid, 98.5 offered range, according to the trader. The paper was not seen trading on Tuesday, but the last time it showed up quotes were in a 98 bid, 99 offered context.

"It's not really down. It just didn't trade," the trader added.

Bond traders meantime saw little of their name - and they said most of the market's attention was focused on the travails of Tenet, whose paper was down a good five to six points pretty much across the board after it announced plans to sell the hospitals, said it would take a $1.4 billion restructuring charge and would likely only break even for the year, and then was downgraded a notch by Standard & Poor's.

A trader noted that Tenet isn't really a distressed name - yet - but said that "a few more sessions like today and it will be."

Back among the genuinely distressed credits, RCN Corp.'s bonds, such as its 9.8% notes due 2008, were seen about two points higher, the 9.8s closing at 59.

International Wire Group Inc.'s 11¾% notes due 2005 were about a point-and-a- half better, at 75.

WestPoint Stevens Inc.'s bonds, however, continued to languish at less than ten cents on the dollar, with the Georgia textile maker's 7 7/8% notes due 2008 quoted bid at 9.

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