Ahern Rentals inks new plan, bonds pop; Exide, Clear Channel, Homex notes still under pressure

By Stephanie N. Rotondo

Phoenix, May 28 - Distressed bonds "were a little bit weaker, despite what equities were doing," a trader said Tuesday.

The trader pointed to a dip in Treasuries as to why the market declined.

The big news of the day was Ahern Rentals Inc. reaching a consensual reorganization plan with bondholders. Under the plan, bondholders will receive a recovery of par plus pre-petition accrued interest.

The bonds popped on the news.

Recently topical names stayed topical despite the long weekend. Exide Technologies Inc.'s 8 7/8% notes due 2018 were seen trading around 66, which one trader called down "another point." The bonds had dropped as much as 10 points on Friday following chatter that the company was looking to line up debtor-in-possession financing.

Clear Channel Communications Inc.'s LBO bonds meantime stayed busy. A trader said the 10¾% and 11% notes due 2016 "continued to drift in," falling to 971/2.

The debt is currently the subject of an exchange offer.

In the emerging market space, Desarrolladora Homex SAB de CV's notes continued to be under pressure. A trader pegged the 7½% notes due 2015 at 33, down 4 points on the day. The 9¾% notes due 2020 declined 1½ points to 33.

Ahern rises on plan

Ahern Rentals said Friday that it had reached a consensual reorganization plan with bondholders that would allow the company's founder, Don Ahern, to retain ownership.

The plan also provides a recovery of par plus pre-petition interest for the bondholders. For his part, Ahern will have to invest $5 million into the company to keep his rights of ownership.

On the news, the 9¼% notes due 2013 jumped to 111 bid, 111½ offered, according to a market source.

Last round-lot trades in the paper were with a 96 handle.

Ahern also held an investor call on Tuesday to discuss its planned $415 million offering of five-year second-priority senior secured notes.

Ahern is a Las Vegas-based construction equipment rental company.

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