Delta bonds firm in late activity; Adelphia bank debt remains busy

By Paul Deckelman and Sara Rosenberg

New York, Oct. 12 - Delta Air Lines Inc. bonds were being quoted at firmer levels after a flurry of late activity Tuesday, pushed up, perhaps, in response to a retreat in oil prices from the record levels seen over the past few days.

In bank loan dealings, Adelphia Communications Corp.'s debt was being described by traders as "a little bit active," continuing the busier tone recently seen in the bankrupt Greenwood Village, Colo.-based cable operator's paper.

Tuesday's activity level, however, seemed to have paled in comparison to that seen last week. In Tuesday's dealings, the company's Old Century paper was being quoted unchanged at 98.75 bid, 99.25 offered and the TCI paper was trading around par, the traders said.

Trading activity in the company's bank debt has picked up recently with "more talks of M&A" sparking the flow, one trader explained.

Adelphia - driven into bankruptcy in 2002 amid allegations that company founder John Rigas and members of his family occupying senior executive positions had, in the words of federal prosecutors, used Adelphia like a private piggy bank before their ouster from power - has been mentioned as a possible acquisition target, either whole or in pieces. While the company's replacement management had envisioned reorganizing and then emerging as an independent stand-alone company, bondholders and other creditors pushed for the company's sale, either as a whole entity or piecemeal, believing it will bring them a greater return. Adelphia reluctantly agreed to explore the sale option, while also retaining the right to restructure without a sale, and began an auction process last month that analysts and other observers expect could generate as much as $20 billion of bids for the company's far-flung cable assets.

While there were some dealings in Adelphia debt Tuesday, the company's bonds were seen essentially unchanged in the very quiet trading which characterized the post-holiday break market.

Adelphia's 7 7/8% notes due 2009 were being quoted unchanged at 85 bid, while its secured 11% notes due 2006 were steady at 125 bid.

Traders described Tuesday's dealings as pretty quiet, as market participants straggled back to work after a long holiday weekend that saw a quiet half-day session on Friday and a full market closure on Monday.

Delta finds late bid

One did take note, however, of "a little flurry in Delta [Air Lines] toward the end of the day, though on no news."

The troubled Atlanta-based airline carrier's bonds were called "strongly bid," with its benchmark 7.70% notes due 2005 quoted as having firmed to 46.5 bid, 48.5 offered from prior levels at 44.5 bid, while its 8.30% notes due 2029 improved to 26.5 bid from 25.75.

Delta, like other airlines, has recently been hard by skyrocketing petroleum prices, since the carriers are major consumers of jet fuel, a key distillate product. But there was good news for the battered sector out of the oil patch on Tuesday, as world crude prices - which hit a record high close of $53.64 a barrel Monday on the New York Mercantile Exchange and which then continued to escalate in early Tuesday dealings to as high as $54.45 - tumbled from those peaks late Tuesday, to end at a relatively restrained $52.51, down $1.13 from Monday's sky-high closing price.

Elsewhere, "it was a lot of nothing," a trader at a distressed-debt house said. "It was like watching paint dry."

RCN lower

One of the few names he saw doing anything was RCN Corp., whose bonds he said, were offered at 50, down a point on the day.

The Princeton, N.J.-based telecommunications company, now restructuring through the courts, on Friday reported a loss for August of $26.63 million, and an operating loss of $7.58 million, according to documents filed with the U.S. Bankruptcy Court for the Southern District of New York.

Winn-Dixie steady

Traders saw the bonds of Winn-Dixie Stores Inc. little changed, apparently unmoved by the Jacksonvillle, Fla.-based supermarket operator's declaration last week that the company's insurance policies would cover any damages, after the initial $10 million company-paid deductible, that it suffered from the Gang of Four killer hurricanes that tore through Winn-Dixie's home turf in the Southeastern U.S. last month.

The company's bonds were "up a little from two weeks ago," the distressed-debt trader said, "but they've been pretty much unchanged the past few days."

He saw the company's 8 7/8% notes due 2008 at 87 bid, while its less-traded 7.803% notes were at 77 bid and its 8.181% notes were at 74.

A market source saw Mirant Corp.'s 7.90% notes due 2009 and 7.40% notes coming due later this year both at 65 bid. However, he also saw the Atlanta-based utility operator's Mirant Americas Generating unit's 7.20% notes due 2008 a quarter-point firmer at 90; while its 9 1/8% notes due 2031 and 8.30% notes due 2011 were each likewise a quarter point better at 88 bid, 89 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.