Mirant bank debt continues drop; Levi continues firming trend

By Paul Deckelman and Sara Rosenberg

New York, March 10 - Mirant Corp.'s bank debt continued its decline on Wednesday, with the paper now racking up a drop in levels over the last couple of days of approximately three or four points.

Among bond investors, Levi Strauss & Co. bonds continued their recent firming trend, although the distressed-bond precincts were seen as generally quiet.

Atlanta energy company Mirant's 2003 bank debt traded at 55.25, the 2004 bank debt traded at 56.125 and the 2005 bank debt traded at 78.5.

"Those were early in the day trades," a trader said. "I don't think it ever rebounded that much. The bonds are off too."

By comparison on Tuesday, the 2003 paper had been quoted at 55.5 bid, 57 offered and the 2004 paper was seen at 56.5 bid, 57 offered. On Monday, the 2003 paper had been pegged at 56.5 bid, 57.5 offered.

"Nobody knows what's going on," the trader said regarding the drop in levels. "I think the company might be drawing on some of their credit lines and that might be spooking some people."

However, not everyone has necessarily heard of this market rumor. A different trader told Prospect News on Tuesday that the dip was probably due to market technicals of there being either a lot of sellers or one big seller in the market trying to get rid of some Mirant paper.

Levi firms more

On the bond side of the market, Levi's notes "continued to show improvement," a trader said, quoting the San Francisco-based blue jeans maker's 7% notes due 2006 as having firmed to 76.5 bid, 77.5 offered, the same levels at which he saw the company's 12 ¼% notes due 2012. He saw Levi's 11 5/8% notes due 2008 as having moved up a bit to 77.5 bid, 78.5 offered.

A distressed-debt trader agreed that the Levi bonds were showing "a good bid, a strong bid."

Levi bonds had fallen to levels as low as the 67-68 area after the company released disappointing earnings more than a week ago, but have been steadily coming back ever since then.

The trader also noted that Trico Marine's bonds "were bouncing around." After having firmed to the mid 60s, he saw the company's paper fall back slightly to the lower 60s.

Winn-Dixie holds higher levels

Winn-Dixie Stores Inc. paper, he said, "was still firm, in the high 80s."

Another trader saw the Jacksonville, Fla.-based supermarket operator's 8 7/8% notes trade as high as 88.25 bid during the day.

The company, trying to turn its fortunes around after having announced an unexpected fourth-quarter loss some weeks ago, has embarked on a belt-tightening campaign, and earlier this week brought in former Burger King chief financial officer Bennett Nussbaum to help right the ship.

Winn Dixie's bonds, formerly trading above par, were beaten down to the high 70s a few weeks ago after Winn-Dixie reported an unexpected quarterly loss. But they have been gradually coming back since hitting their lows after the company announced plans to tighten its belt and try to improve operations.

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