Exide takes hit as company changes refinancing advisers; TXU bonds dip despite good tax news

By Stephanie N. Rotondo

Phoenix, April 4 - Exide Technologies Inc. was the nom du jour in the distressed debt arena on Thursday.

The company's bonds took a beating during the session following reports of a refinancing team shakeup. Paper fell as much as more than 10 points, but it managed to regain a little bit of ground, ending down only 6 to 7 points on the day.

Meanwhile, Energy Future Holdings Corp. - or TXU, as it is more commonly referred to - saw its debt softening. On Wednesday, the company announced that it would not face a $23 billion tax liability due to a stock transfer. Still, it is believed that a bankruptcy filing at the company's Texas Competitive Electric Holdings unit will come within a year.

Exide plummets on refi news

Exide Technologies' 8 7/8% notes due 2018 was the "top trader of the day," a trader said, as it was reported that the company had changed firms to advise it on financing alternatives.

The trader said the bonds fell to lows of 71½ before rallying back a little. But "even rebounding off of its lows," the debt was still down at least 6 points, he said, at 781/2.

Another trader called the issue down 7 points, seeing them in a 77 to 78 context.

"They did trade down to 72," he noted.

Last year, the Milton, Ga.-based battery maker had hired Deutsche Bank AG to work on a global refinancing. News reports out Thursday indicated that management had swapped Deutsche Bank for adviser Lazard and law firm Akin Gump Strauss Hauer & Feld LLP.

The company is looking to refinance in order to deal with capital issues, as well as an upcoming convertible debt maturity in September.

TXU debt slips

A trader said TXU bonds were experiencing some volatility on Thursday, as the market reacted to news out late Wednesday regarding a decision on a potential $23 billion tax liability.

The trader said the bonds were down slightly on the day, seeing the 10¼% notes due 2015 at 10½ and the 15% notes due 2021 at 261/2.

Another trader pegged the 10¼% notes at 10½ as well.

Late Wednesday, the Dallas-based electricity producer said that it would be spared a $23 billion tax liability in regard to an intercompany transfer of stock. The decision handed down by the Internal Revenue Service will allow the company to place its Texas Competitive Electric Holdings unit into bankruptcy without penalty.

Among other power producers, a trader saw AmerenEnergy Generating Co.'s 7% notes due 2019 rising 3 points to close at 83.

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