Mississippi Chemical up as plan filed; Mirant steady despite sharply wider loss

By Paul Deckelman and Sara Rosenberg

New York, April 19 - Mississippi Chemical Corp. bonds were being quoted at higher levels Monday after the filing Friday of the Jackson, Miss.-based chemical maker's plan of reorganization with the bankruptcy court overseeing its restructuring. Elsewhere, Mirant Corp.'s bonds and bank debt were seen essentially little changed, despite its release of 2003 results that showed a sharply wider loss for the Atlanta-based energy operator than it had the previous year.

Mississippi Chemical's 7¼% senior notes due 2017 were seen having moved up to 41 bid, 43 offered from prior levels around 38 bid, 40 offered. At another desk, a market source saw the bonds as having firmed to 42 bid from 39.

On Friday, the company, which sought protection from the holders of its $200 million of junk bonds and other creditors in a Chapter 11 filing last May with the U.S. Bankruptcy Court for the Southern District of Mississippi, filed its reorganization plan and the accompanying disclosure statement.

The plan envisions that the holders of the 7¼% notes and holders of $14.5 million of industrial revenue bonds would get 90% of the reorganized company's new common stock, and that their estimated recovery would be about 60.1%, according to the disclosure statement.

A market source saw the bonds of another bankrupt chemical company - Solutia Inc. - as having firmed slightly, with the company's 7 3/8% notes due 2027 having moved up to 43.75 bid from prior levels around 42.5.

Last week, St. Louis-based Solutia, which along with 14 U.S. subsidiaries sought protection in a December filing with the U.S. Bankruptcy Court in New York, got the court's okay for a 90-day extension of its exclusivity period, during which only the company can file a plan of organization. That period, which was to have expired last week, has now been extended to July 14, while the company has till Sept. 12 to solicit creditor approval for whatever plan it ultimately comes up with.

Solutia claimed total assets of $2.85 billion and combined debts of $3.22 billion when it went into Chapter 11, citing the burdens of environmental lawsuit liabilities and pension obligations it inherited from former corporate parent Monsanto Co., which spun Solutia off seven years ago.

Mirant unchanged to slightly lower

Mirant Corp.'s 2003 bank debt was being quoted around 57.25 bid, 58.75 offered - basically unchanged - on relatively quiet trading, as many market players seemed to ignore the power generating company's latest results, one bank debt trader said, even though the numbers showed a sharp deterioration in the company's troubled finances.

The story was pretty much the same in the bond trading pits, where most issues were unchanged to perhaps slightly lower.

Parent Mirant's 9½% notes due 2009 were seen unchanged at 101.5 bid. Mirant subsidiary Mirant Americas Generating LLC's 5½% notes due 2006 and 9¼% notes due 2021 were quoted unchanged at par, while its 7½% notes due 2011 were half a point easier at 92.5, and its 15% notes due 2008 were likewise off half a point at 109. MAG's longer issue, the 7¼% bonds due 2031, slipped a bit more, to 90.25 bid from 91.5.

A market source pegged Mirant Mid-Atlantic LLC's 7½% notes due 2017 retreating a little to 100.75 bid from 101.25, and saw the unit's 8 1/8% notes due 2012 "actually going up" to 66.5 bid from 65.

Another trader, however, flatly declared "I didn't see a move in anything" with the Mirant name attached and an observer at another desk agreed, quoting Mirant's 5¾% notes due 2007 and 7.90% notes due 2009 little changed from Friday's levels at 60.5 bid and 61.5 bid, respectively, while its 9 1/8% notes due 2017 held steady at 104.5.

A trader saw the company's 8.30% notes due 2011 unchanged at 75.5 bid, 76.5 offered.

On Monday, Mirant - which ducked under the Chapter 11 umbrella last July after having been severely battered by the overall downturn in the power generating and energy trading industry sparked by the Enron debacle in late 2001 - released 2003 financial results.

These included a net loss of $3.8 billion ($9.47 per diluted share), sharply wider than the 2002 deficit of $2.4 billion ($6.06 per diluted share)

Even though overall operating revenue for 2003 was stronger at $5.2 billion compared with $4.1 billion for 2002 due to higher market prices for power, that was more than offset by a $2.1 billion impairment of goodwill recorded in the second quarter and $1.6 billion impairment related to long-lived assets recorded in the fourth quarter,

Mirant also announced that it will not hold an annual meeting for 2004. "The company determined it would be in the best interest of stockholders to put the money it would spend on an annual meeting toward its financial restructuring and emergence from Chapter 11," the company's news release said.

Looking ahead, Mirant - which said it had about $1.5 billion of cash or cash equivalents on hand at the beginning of this month - plans to trim its operations, which could result in additional job cuts on top of the 550 positions it eliminated last year.

Mirant owns or controls about 18,000 megawatts of electric generating capacity in the U.S. (Its foreign subsidiaries are not part of the bankruptcy case), but anticipates slicing its total capacity by 1,592 megawatts over the next five years. Among the facilities which the company indicated could be targets are a part of its natural gas plant in Cambridge, Mass. and its Wrightsville, Ark. plant in 2004.

Mirant also indicated that it does not expect to independently complete four suspended construction projects that would have supplied the company with an additional 2,188 megawatts of capacity.

Weirton Steel falls

A trader in distressed bonds quoted Weirton Steel Corp. "a little lower," with the bankrupt West Virginia steelmaker's 10% notes due 2008 having slid down to 17 bid from prior levels around 24.

The Weirton bonds - which had been trading in the 40s only a few sessions ago - have slid sharply on the company's announcement that it intends to formally tell a Wheeling, W. Va. Federal bankruptcy court judge Tuesday that the company recommends that its assets be sold to International Steel Group Inc., controlled by financier Wilbur Ross.

Weirton had some weeks ago come to an agreement with Ross, who in February indicated willingness to buy the assets for around $158 million, plus the assumption or about another $97 million of debt - which caused the bonds to slide precipitously into the 20s from levels as high as the 60s, as the bondholders felt that Ross was giving them short shrift.

The bonds crept back up into the mid-40s as a second bidder - led by some of the senior secured bondholders themselves - put together a bid that offered about $138.74 million cash and a credit bid of $25.5 million. In addition, noteholders would assume $97 million in liabilities, the group said.

In announcing last week that it was endorsing the ISG bid, Weirton cautioned that it would not discuss the specific details of the two bids, leaving that disclosure for Tuesday's hearing.

Ross has built Cleveland-based ISG into one of the powerhouses of a reviving American steel industry, scooping up valuable assets of ruined once-formidable steelmakers such as Bethlehem Steel and LTV Corp. at fire-sale prices and negotiating labor agreements that do not burden the company with the heavy legacy costs that brought the former steelmakers down. Weirton's union also came to an agreement with ISG in hopes of preserving several thousand jobs there.

Trico down, Winn-Dixie steady

A trader saw the bonds of Trico Marine Services Inc. fall some two to three points in early dealings Monday, only to bounce back up off those lows to end unchanged at 52 bid, 53 offered. He saw no news out on the Houma, La.-based provider of marine support services to the oil-drilling industry.

He likewise saw nothing going on during "a very quiet day" in Winn-Dixie Stores Inc., whose 8 5/8% notes had pushed up above 91 bid by Friday on renewed rumors that the majority owner of the Jacksonville, Fla.-based supermarket operator might take the company private.

At another desk, a source saw "no change" in the bonds of San Francisco-based jeans maker Levi Strauss & Co., which had been firming smartly over the past week or so from recent lows, pushed up by short covering and market gossip - all unconfirmed as of this date and so far apparently unfounded - that the company might sell a product line or might even be acquired.

Levi's 11 5/8% notes due 2008 are currently situated around 88 bid, while its 12 ¼% notes due 2012 are at 87.5 bid, also firmer.

A market source saw Adelphia Communications Corp. notes up a point, but dismissed the rise as "the same old stuff," as the Greenwood Village, Colo.-based cable operator gets closer to the point where it can emerge from Chapter 11. Adelphia's 9 5/8% notes due 2007 firmed to 102 bid in Monday's dealings.

The moment of emergence is just about here for MCI Corp. - the former WorldCom - scheduled to come out of bankruptcy Tuesday after having jettisoned its old scandal-linked name, ex-chairman Bernard Ebbers and other executives and more than $30 billion of debt.

A trader said the old MCI bonds were half a point lower at 80.5 bid, 81.5 offered, but added that "after [Tuesday], you won't see them anymore anyway."

He quoted the company's when-issued three year notes at 101 bid, 102 offered, its WI five-years at 101.25 bid, 102.25 offered and its WI 10-years at 103.5 bid, 104.5 offered.

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