Adelphia bank debt easier amid weak market; asbestos bonds firm slightly

By Paul Deckelman and Sara Rosenberg

New York, July 26- Bank debt of Adelphia Communications Corp.'s Century Communications unit was seen easier Monday, pushed down amidst a generally softer secondary loan market.

In bond trading, a distressed-debt trader, wracking his brain for something - anything - to talk about amid a generally becalmed market - noted that several of the asbestos-linked names seemed firmer, although there seemed to be no fresh news out about the ongoing legal and political battle surrounding the medical claims issue.

Adelphia's Century bank debt was down about half a point in an overall weaker secondary loan market on Monday, a trader said, with the New Century paper quoted at 95.5 bid, 96.5 offered and the Old Century loan quoted at 96 bid, 97 offered.

"Cable valuations came in," a second trader said. "Look at all the cable stocks and how hard they've gotten hit."

Meantime, the bankrupt Greenwood Village, Colo. cable company's 9 7/8% notes due 2007 were seen off nearly two points at about 90, while its Century 8 7/8% notes due 2007 were a point lower at 106.

However, at another desk, a market source quoted Adelphia's 10 7/8% notes due 2010 unchanged at 93.

Illustrating the loan trader's assessment about how cable company securities have recently come in, Charter Communication LLC's 9.92% notes due 2011 were down a point-and-a half, around 75 bid, while the St. Louis-based cabler's 8 7/8% notes due 2009 were a point lower Monday at 77 bid.

However, at another desk, Charter's 10¼% notes due 2010 were actually up half a point at just above par.

Back among bank debt investors, Leap Wireless International's bank debt fell in Monday's market, moving down by about a point to 123 bid, 124 offered, according to a trader.

"Nextel was down," he explained. The stock market is down pretty hard over the last month."

Leap is a San Diego-based telecommunications company.

Pegasus falls

Also in the communications arena, a market source saw Pegasus Satellite & Communications Inc.'s 12½% notes due 2007 were two points easier at 56.5 bid, although there was no fresh news out on the Bala Cynwyd, Pa.-based satellite television programming distributor, now in Chapter 11 as it attempts to hang onto its valuable exclusive rights to sell DirecTV service to customers in its marketing territory - something DTV wants to abolish.

Elsewhere, Oneida Ltd.'s bank debt stabilized Monday with one trader quoting it at 85 bid, 87 offered. On Friday the paper was down about five or six points closing around the 84 level.

No specific news was seen pushing the Oneida, N.Y. provider of flatware and dinnerware's paper down.

The most recent news that the company has put out was about two weeks ago, when it announced the signing of a letter of intent to sell substantially all of the assets of its Encore Promotions Inc. subsidiary to Bradshaw International Inc., and also to enter into a licensing agreement with Bradshaw. The sale is expected to be completed by July 31.

Asbestos names steady to better

A trader saw some firmness in the names of asbestos-linked companies, even though Congressional efforts to reach agreement on a claims mechanism seem to have once more stalled.

He quoted Owens-Corning's notes as having pushed up to 43.5 bid, 44.5 offered from prior levels at 42.5, while Armstrong World Industries bonds were likewise half a point better at 61.5 bid, 62.5 offered.

However, another market source saw no changed in the bonds of Armstrong, a Lancaster, Pa.-based floor covering maker currently in Chapter 11 due to a flood of asbestos-linked medical damage suits, or in the bonds of Toledo, Ohio-based insulation maker Owens Corning, in bankruptcy for the same reason.

But the source did see some firmness in the bonds of Federal-Mogul Corp., quoting the bankrupt Southfield, Mich.-based auto parts maker's notes as having firmed as high as 29 bid from recent levels at 26.75.

Federal-Mogul - also brought low by asbestos litigation - reported this past Thursday that for the three months ended June 30 it had net sales of $1.577 billion, an increase of 10%, or $149 million, over last year. The company also had income from continuing operations before income taxes of $11 million after recognition of an asset impairment charge of $20 million, compared with $19 million last year, and cash flow from operations of $162 million.

For the six months ended June 30, Federal-Mogul reported net sales of $3.13 billion, up $334 million compared with last year. Income from continuing operations before income taxes increased by about $10 million from the same period in 2003, and cash flow from operations of $281 million exceeded $194 million last year.

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