More upside for Adelphia; asbestos names rebound; Collins & Aikman bank debt firmer

By Paul Deckelman and Sara Rosenberg

New York, June 23 - Adelphia Communications Corp.'s bonds continued to firm solidly as the bankrupt Greenwood Village, Colo.-based cable operator moved Friday to make it more certain that Adelphia will be able to sell its joint-venture assets to cable giant Comcast Corp. and then deal the rest of the company to Comcast and the latter's partner, Time Warner Cable. Those maneuverings come in the wake of conference calls earlier in the week between Adelphia's creditors and the company seeking to hammer out a framework for the bankruptcy case to move forward.

Also heading upward were the bonds of bankrupt asbestos-challenged issuers such as Owens Corning and Armstrong World Industries Inc.

That followed the news that the bankruptcy court overseeing Owens Corning's restructuring had approved the company's agreement with its key creditor groups.

Collins & Aikman Corp.'s bank debt traded up during Friday's session as stronger bids for the paper emerged after a call was held to go over the company's most recent financials, traders said.

A trader said "some distressed names caught a bid late in the afternoon, so they probably were up a couple of points today."

Adelphia's bonds were up for a third straight session, as the company's efforts to bring to a successful conclusion its long-running bankruptcy case seemed to be pickling up steam.

A market source saw Adelphia's 10¼% notes due 2011 move up to 57 bid from 55.25 on Thursday, while its 10¼% 2006 notes also firmed, to 52.375 from 50.5.

At another desk, the 2011 101/4s were seen a point better at 56 bid, 57 offered. And a trader noted that the bonds of Adelphia's Century Communications Corp. unit were also better, its 9½% notes that were to have been paid off last year two points better at 95 bid, 96 offered.

"They posted some settlement terms" in the company's bankruptcy case docket, the trader said, and "the holders are figuring its good for Century, and for the parent as well."

Adelphia's bonds had climbed solidly late Wednesday and especially on Thursday on Thursday after the judge handling its bankruptcy case posted some settlement guidelines on Wednesday evening.

Adelphia on Thursday sought to build on that momentum, as it executed amendments to its purchase agreements with Time Warner NY Cable and Comcast Corp. and filed a modified joint venture plan of reorganization Friday with the U.S. Bankruptcy Court for the Southern District of New York relating to the two joint ventures it holds with Comcast.

Adelphia's amended plan includes changes intended to facilitate confirmation by addressing joint venture constituent concerns.

The company said the amendments to the purchase agreements and the filing of the modified plan are a further step in completing the sale of substantially all of Adelphia's assets to Time Warner NY Cable and Comcast as soon as possible.

Owens Corning better

Elsewhere, Owens Corning's bonds - which have been taking a drubbing all this month, after having dropped from the peak levels they hit in late May - were seen having a bounce, which in turn was reflected in the bonds of other asbestos names, such as Armstrong, which generally moves in tandem with Owens.

"There was a bounce in asbestos, a trader said," because there was news out - they got court OK for their agreement, so it looks like the plan is moving forward."

The trader saw Owens Corning's bonds, like its 7½% notes due 2005, up three points at 83.5 bid, 84.5 offered.

He saw Armstrong's 6½% notes due 2005 also better, up two points at 72 bid, 73 offered.

While the bonds of both are up several points from their recent lows, they are still well below the peak levels seen in late May - 122-123 for the Owens bond, about 90 for Armstrong's.

Judge Judith Fitzgerald of the U.S. Bankruptcy Court in Wilmington, Del., signed off on the plan-support agreement, which commits Owens Corning and official representatives of groups such as the bondholders, trade creditors, asbestos claimants and shareholders to support the company's Chapter 11 proposal.

The global settlement ended the threat of continued litigation that could have hung over the Toledo, Ohio-based building materials maker for years.

Collins & Aikman loans gain

In the bank loan market, Collins & Aikman's numbers "numbers were towards the low end. But there seemed to be better bids for the paper," the trader said.

"A couple of buyers who have expressed interest in the company still seem to be interested so there's a chance the paper will be taken out at par," the trader added.

For the month ended May 28, Collins & Aikman reported a $15.76 million operating loss on sales of $144.21 million, compared to an $18.81 million operating loss on sales of $140 million in April. The net loss for May was $19.28 million, down from a $22.76 million April net loss.

The Troy, Mich.-based automotive company's bank debt closed out Friday quoted at 94.5 bid, 95.5 offered, up a point from Thursday's levels, the trader said, adding that a block of the paper even traded as high as 95.5 during the session.

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