Adelphia bank debt up; Parmalat bonds firm from lows

By Paul Deckelman and Sara Rosenberg

New York, March 25 - Adelphia Communications Corp.'s bank debt traded higher on Thursday in reaction to the release of good monthly numbers and a Wall Street Journal article saying that the company is a good acquisition candidate, with Time Warner Inc., Cox Communications Inc. and Comcast Corp. all listed as potential buyers.

A trader quoted Adelphia subsidiary Century Communications Corp.'s New Century bank paper at 94 bid, 95 offered; the Old Century paper was quoted at 95 bid, 96 offered and the Century revolver was quoted at 92.5 bid, 93.5 offered, the trader said, adding that all three tranches were up about a half to three quarters of a point on the day.

On Thursday, the Greenwood Village, Colo.-based cable company - in bankruptcy proceedings since 2002 - filed results for the month ended Feb. 29 that included revenue of approximately $323 million and operating income of approximately $12 million, according to the company's 8-K.

Adelphia's bonds, meanwhile, were quoted by a trader as "firm, close to par."

At another desk, the company's 9 7/8% notes due 2007 were seen a point better at 95 bid. Century's 8 7/8% notes due 2007 were half a point better at 104.5.

The Wall Street Journal report documented the growing tide of opinion that Adelphia should try to sell itself rather than attempt a stand-alone reorganization - a move which proponents claim would create more value for creditors and possible leave enough to generate a payout for stockholders.

Initially it was equity security holders that demanded the auction but some creditors have now backed the call.

Furthermore, some of the bank creditors have opposed the company's reorganization plan for other reasons.

Parmalat drops, then rises

Elsewhere, Parmalat Finanzaria SpA's bonds were "a little easier early on," a distressed-debt trader said, "but they improved later on."

He quoted the bankrupt Italian-based dairy products company's sole dollar-denominated issue, its 6 5/8% notes due 2008, as having firmed to 11.5 bid, 12.5 offered, up from prior levels about 10 bid, 11 offered.

The company's other bonds, all euro-denominated, were "all over the place," some trading around 9 bid, some around 10 and some around 11.

Parmalat's banks and bondholders are scheduled to meet with the company's government-appointed turnaround administrator, Enrico Bondi, on Friday, although it is not expected that Bondi will make any firm commitments to them as far as possible repayment levels. Instead, he is expected to try to calm the creditors by generally outlining his plans to turn the firm around.

Earlier, an Italian newspaper reported that the turnaround plan would allow creditors to recover up to one-third of their investment as the dairy group will convert €12 billion of its €14 billion euros of debt into equity.

In a statement, Parmalat said reports that creditors would be guaranteed a repayment of between 25% and 33% are "completely without foundation."

Fibermark Inc.'s bonds were being quoted at 49.5 bid, 41.5 offered, up from 47 bid, 49 offered previously, a trader said, noting that the company's notes "are still trading with interest."

Back on the bank debt front, Motor Coach Industries International Inc.'s bank debt was down about half a point with the paper quoted at 97.5 bid, 98.5 offered, according to a trader.

"I think it's just because no new details emerged on the refinancing that was rumored last week," the trader explained.

Motor Coach is a Schaumburg, Ill. motor coach company.

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