Adelphia bonds seen higher as bankruptcy plan released; Collins & Aikman gyrates at lower levels.

By Paul Deckelman and Sara Rosenberg

New York, June 27 - Adelphia Communications Corp.'s bonds were heard trading at higher levels Monday after the bankrupt Greenwood Village, Colo.-based cable operator released details of its revised bankruptcy plan, which provides for the payment of over $9 billion in cash plus an undetermined amount of Time Warner Inc. stock to its creditors in exchange for their claims.

Also moving around in an otherwise sleepy session - though on the downside, unlike Adelphia - was Collins & Aikman Corp. debt. Its bonds, which had fallen sharply Friday, were seen bouncing around at lower levels, while its bank debt was active but essentially unchanged.

Adelphia's bonds were seen better following the release of the company's second amended plan of reorganization, which was filed with the U.S. Bankruptcy Court for the Southern District of New York in Manhattan, which is hearing the case.

"Those bonds are up a little bit" after the company put out the details on its plan, even though, a trader said, "it was kind of as-expected."

He quoted Adelphia's 10¼% notes due 2011 at 93 bid, 94 offered, up from levels about 89 bid, 90 offered "a week ago." The issue has been "most active."

The trader opined that "once people figure out that it will be a six to nine months, or nine to 12 month timeframe for the end of the bankruptcy process, the workout is basically par plus accrued [interest]. So the bonds should continue to trade higher.

Another trader saw those 101/4s at 92 bid, 93 offered, while its 8 3/8% notes due 2008 were at 85 bid, 87 offered, both "a tad higher."

A market source saw the company's 9 7/8% notes due 2007 up perhaps half a point, at 88.

However, another trader was quoting the Adelphia bonds "pretty much where they already were," with the 101/4s at 91 bid, 93 offered, its 10 7/8% notes due 2010 at 88 bid, 90 offered, its 9 7/8% 2007s and its 9 7/8% notes due 2005 both at 87 bid, 89 offered.

UAL rebounds a little

Elsewhere, UAL Corp., the parent of bankrupt United Airlines, was seen at 12 bid, 13 offered, up perhaps a point from the levels that the bonds were seen having fallen to on Friday, from prior levels around 14.5. A trader noted the fact that earlier in the year, the Elk Grove Village, Ill.-based Number-Two U.S. airline operator's bonds were trading in the mid-single-digits.

UAL said Monday in a regulatory filing that a regulatory filing that it wants to increase its current debtor-in-possession financing deal by $310 million to $1.3 billion, and extend the maturity date for the lending package being provided by JPMorgan Chase & Co. and Citigroup to Dec. 30, 2005 - and seeks an option to further extend that deadline to March 31, 2006.

Some analysts reportedly said that the bid to extend the maturity date on the loan package could be an indication that UAL - which has said it expects to emerge from Chapter 11 before the end of the year - may have to come out of bankruptcy later than planned.

Collins & Aikman sinks

Back on the ground, Collins & Aikman bonds were seen gyrating around at lower levels, although the movements were nothing like the dramatic drop that the Troy, Mich.-based automotive interior components maker's bonds went though on Friday on market talk that its bank meeting with its lenders had not gone well and indications that it is liquidity challenged.

Traders saw the company's 10¾% senior notes due 2011 falling as low as 23 bid, 25 offered, before they "got up off the bottom," one of them said, to end only moderately lower, around 27 bid, 28 offered. At the same time, he said, the 12 7/8% notes due 2012 were being offered around 4.5, and he suspected that the bonds were probably trading in a context of 3 bid, 4.5 offered.

On Friday, those bonds had nosedived, with the senior notes having retreated to closing levels around 29 from prior levels around 40-41, while the 12 7/8% subs fell to around four cents on the dollar from prior levels around seven cents.

A trader in distressed bank loans meantime said that Collins & Aikman's paper was active on Monday in the 72.5 bid, 73.5 offered context, unchanged from Friday.

However, on Friday, the bank debt had plummeted from trading at around 89 at the open to around 71.5 bid, 73.5 offered by the close after the company held a private bank call in the morning.

That slide in the bonds and the bank debt was triggered by several factors, among them, market scuttlebutt that made the rounds that the call with the lenders had not gone well, with the company said to have sprung the unpleasant surprise news that it now expects its full-year EBITDA to come in somewhat below the $200 million to $225 million range that it had earlier forecast.

A market source also cited indications that the company had already "run through" half of the $300 million of debtor-in-possession money the banks had agreed to lend it to fund operations while it straightens itself out - forcing it to petition the court on an emergency basis for more funding to keep operating until it can access the rest of the DIP funds.

Last Wednesday, Collins & Aikman filed an emergency request with judge Steven W. Rhodes of the U.S. Bankruptcy Court for the Eastern District of Michigan in Detroit, saying it needed a post-petition "bridge loan" of $30 million from its lending customers in order to meet working capital and other needs, pending a hearing this coming Thursday at which it will seek access to the remainder of the DIP money.

According to court papers, Rhodes granted the company's request for an expedited hearing process, shortening the customary objections period so that it would end at noon ET Thursday, and then slating a special hearing on Collins & Aikman's motion afterward. The court papers further said that after hearing the company's arguments, Rhodes issued an interim order late Thursday granting Collins & Aikman's motion and approving the bridge loan arrangement, giving the lending customers administrative priority claim status - which bumps them ahead of the most other creditors.

After the company's May 17 Chapter 11 filing, Rhodes granted access to the first $150 million tranche of the DIP money on an interim basis, and scheduled a hearing about releasing the remainder for June 30.

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