Mirant bank debt jumps, Adelphia active; Delta gyrates amid uncertainty about retirement issue

By Paul Deckelman and Sara Rosenberg

New York, Sept. 14 - Mirant Corp.'s 2003 bank debt was heard to have taken a big leap on Tuesday even as traders said there was no fresh news out on the Atlanta-based energy operator. Also on the distressed bank loan front, Adelphia Communications Corp. paper was seen as active.

Among bond investors, Delta Air Lines Inc.'s notes were "gyrating around," a trader said, although he really only saw activity in the troubled Atlanta-based air carrier's benchmark 7.70% notes due 2005, which he saw as having moved back up to 44 bid, 46 offered from 42 bid, 44 offered previously.

He meantime saw the company's 8.30% notes due 2029 at 25 bid, 27 offered and its 7.90% notes due 2009 at 29 bid, 31 offered, both essentially unchanged on the session.

Another trader termed Delta "pretty quiet," although he did see "somebody around trying to buy guaranteed-delivery 7.70s. They must have bid a pretty good price - but other than that, things were pretty quiet."

Delta's bonds have been rocketing up and down in tandem with the changing developments in the beleaguered airline's fortunes - sometimes counter-intuitively. On Monday, the bonds were languishing at lower levels, even as chief executive officer Gerald Grinstein said that recent talks with Delta's pilots on the airline's demand for further wage-cut concessions and on the issue of early pilot retirements, give him hope that a pilot agreement can be reached later this week.

On Tuesday, however, even as the short-term bonds appeared to strengthen, officials of the pilots union moved to downplay such speculation, with a union spokesperson declaring that there are no talks set for this week. With union leaders beginning a two-day meeting in Virginia to wrestle with the retirement issue, an agreement that quickly "seems unlikely."

Mirant loans rise

Among the bank debt investors, Mirant's paper was seen moving all the way up to 61.25 bid, 62.25 offered from 60 bid, 61 offered at Monday's close. A trader said that brought total gains for the week to about a point and a half.

There is no public news out there causing this strengthening. And, according to one trader, there's "nothing going on behind the scenes either" but investors are buying into the Atlanta-based energy company's debt because they think it's cheap.

Adelphia bank debt active

Adelphia Communications' Century unit bank debt "saw a lot of trading" activity at unchanged levels with investors' excitement about the possibility Time Warner Inc. might again emerge as a buyer for some or all of the bankrupt Greenwood Village, Colo.-based cabler's assets enhanced by apparent forward momentum on the sale process with Tuesday's latest court ruling, a trader said.

Once again, the New Century paper was quoted at 98 bid, 99 offered and the Old Century paper was quoted at 98.5 bid, 99.5 offered, the trader said.

On Tuesday there was a hearing at which the U.S. Bankruptcy Court Southern District of New York approved UBS Securities LLC and Allen & Co. LLC as merger and acquisition advisors to Adelphia.

"The ball is officially rolling on the auction process," the trader said happily.

And there was also some carry-over excitement from Monday's news that Time Warner dropped out of the Metro-Goldwyn-Mayer Inc. auction - a move that led many to believe that Time Warner may once again be a potential buyer of Adelphia or of some Adelphia assets.

Those assets are expected to be put up for auction later this month. According to some industry observers, Adelphia - either sold whole or busted into its component parts - could be worth as much as $23 billion. Some of its assets are highly prized, such as its cable clusters in the metropolitan Los Angeles area.

Adelphia's bonds meantime were a mixed bag in otherwise quiet trading, a trader said, quoting its 10 7/8% notes due 2010 as having eased to 91.5 bid, from 92 previously, while its 10¼% notes due 2011 firmed slightly to 94 bid.

Another trader however said that from where he sat, "there was nothing we saw."

Adelphia's Century Communications 8 7/8% notes due 2007 were seen down about a point at 107.5

Among other distressed bonds, Dobson Communications 8 7/8% notes due 2013 were off a point to 68.5.

Outside the communications area, Winn-Dixie Stores Inc.'s 8 7/8% notes due 2008 were a point lower at 87.

Supermarket supplier Fleming Cos., Inc. settled Securities and Exchange Commission charges of improper accounting and several of its suppliers will pay penalties stemming from Fleming's overstatement of profits in 2001 and 2002.

However, a trader said, he had seen no movement in the Dallas-based company's bonds, with its senior notes still at 17.5 bid, 18.5 offered and its junior paper at quotes of ¼ point bid, ¾ point offered.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.