Adelphia bank debt trades around; little response to Haynes missed payment

By Paul Deckelman and Sara Rosenberg

New York, March 1 - Adelphia Communications Inc. bonds and bank debt continued to trade fairly actively on Monday as the market attempted to evaluate the import of the bankruptcy plan released last week and moves by shareholders and banks to challenge it.

Elsewhere, the generally expected news that Haynes International would miss the scheduled March 1 coupon payment on its 11 5/8% senior notes coming due this September had little impact on the bonds.

A market source said Adelphia's bonds were "slightly lower," quoting its 10¼% notes due 2011 down a point at 99.5 bid while its 9 3/8% notes due 2009 were three-quarters of a point lower at 101.25. He saw its 8¾% notes due 2007 down half a point at 110.5

Another trader noted that Adelphia's convertible notes were up a couple of points, "into the lower 40s."

Among bank loan investors, a few trades were seen having taken place on Adelphia's Old Century bank debt at 95.75 bid and the paper ended the day with quotes of 95.5 bid, 96.5 offered, said a trader, who pegged the paper at 95 bid, 96 offered on Friday.

Another trader said the paper was quoted at around 94.75 bid, 95.75 offered on Friday.

"People were taking time last week to digest the news [of the reorganization plan]," the first trader said in explanation of why the paper is trading higher. "Now people are coming back in to trade it."

When asked whether the pre-petition bank lenders' move last week to end the Greenwood Village, Colo.-based cable company's exclusive period had anything to do with the rise, the trader responded: "It could potentially drive it up but it's not like it was unexpected."

Adelphia's bank debt had moved down over the second half of last week following the company's announcement of its plan of reorganization, which left some feeling disappointed since the company intends to withhold cash and maintain a big escrow rather than paying all bank lenders immediately.

Then, on Thursday, the company's pre-petition bankers filed documents with the U.S. Bankruptcy Court for the Southern District of New York asking for an end to Adelphia's exclusive periods. The group of bankers believes creditors should have a choice of reorganization plans, since they see this plan as one-sided, benefiting a group of subordinated creditors, who, if the plan is approved, would become the new shareholders.

A hearing is scheduled for Tuesday. Adelphia and substantially all of its debtor subsidiaries filed for Chapter 11 on June 25, 2002.

Calpine revolver trades

Also on the bank debt front, Calpine Corp.'s CCFC II revolver traded a bit on Monday as well with one trader saying that some trades took place in the 97.5 context, while a second trader said that the level seemed a little high and places the revolver at 96.5 bid, 97.5 offered.

There were some rumors floating around that the company was going to bring its recently cancelled financing package back to the market but with a different underwriter this time around. Deutsche Bank was the lead bank on the pulled bond and bank deals that were going to be used to refinance the CCFC II revolver.

"I've heard rumblings but nothing concrete," a trader said.

Calls to the San Jose, Calif.-based indendent power producer were not returned prior to press time.

Back among the distressed bond traders, Doman Industries Ltd. bonds, which had gained several points on Friday on news that the bankrupt Canadian forest products firm had agreed to sell much of its assets to International Forest Products Ltd., were seen continuing to hover around those same levels, with several trader seeing its 8¾% notes coming due on March 15 up maybe another point or so.

One said "they moved [on Friday] to the upper 20s from the low 20s before" on the Interfor news, quoting them now at 29 bid, up a point on the session.

But at another desk, where the bonds had been pegged as high as 30 on Friday, they were actually seen having eased to that same level around 29.

Traders meanwhile said that there was little or no movement in the bonds of Haynes International, after it missed its March 1 interest payment, causing Standard & Poor's to drop its rating to D from CC previously.

Those 11 5/8% notes were quoted little changed, at 59 bid.

"The news didn't exactly scare anybody," a distressed-debt trader said.

Overall, he opined, the distressed market was "kinda blah. I don't know what you're hearing elsewhere - but it was pretty quiet over here."

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