Oxford Auto up on asset-sale developments; Boston Exelon loan sale confirmed

By Paul Deckelman and Sara Rosenberg

New York, Dec. 6 - Oxford Automotive Inc. bonds were seen up solidly Monday on the news that the Troy, Mich.-based automotive components company had completed the sale of one of its plants - and was looking to sell other assets as well.

In bank loan trading, the previously reported rumors that an auction for $75 million of Boston Exelon, a project energy loan, took place on Friday morning proved to have been true, as it was disclosed by one trader that Bear Stearns did indeed trade the piece in the 98.6 context.

The auction is just another piece in the recent trend in which energy project finance bank debt, such as Teco Panda and Lake Road, have been unusually active, as banks are trying to sell off some of their positions before year-end.

The Boston Exelon project was owned by Exelon Corp. at one point but is now owned by lenders.

Back among the bond investors, a trader in distressed issues saw Oxford Auto's 12% notes due 2010 as having pushed up to 53 bid, 56 offered from prior levels down around 46 bid, 49 offered.

On Friday, Oxford said that it had completed the sale of its newly renovated McCalla, Ala., stamping plant to Corporacion Gestamp, a Spanish-based metal-stamping company. There was no official word on the deal's price, although news media reports put the price tag at over $100 million.

Oxford - which is trying to get a handle on its $280 million debt load - was reported to also be shopping some of its other industrial assets, entertaining inquiries from potential buyers about its Prudenville and Lapeer plants in Michigan.

Oxford restructured via Chapter 11 in 2002, and there has been speculation that the company might be making a return trip to the courts, especially since it missed a bond payment in September. Company executives scoffed at the notion; however, Oxford's Canadian operations did file for bankruptcy earlier this year.

Intermet gains

Another troubled automotive supplier, Troy, Mich.-based Intermet Corp., was seen up a point in quiet dealings Monday, its 9¾% notes due 2009 seen advancing to 33 bid, 35 offered.

Last week, the company's bonds had gyrated around the mid-to-upper 20s before pushing back over the 30 mark on Friday.

Novi, Mich.-based automotive supplier R.J. Tower Corp.'s 12% notes due 2013 were down a point at 75.5 bid.

Adelphia lower

Apart from the automotive names, Adelphia Communications Corp. bonds, which had recently run up as the bankrupt Greenwood Village, Colo.-based cable operator began the process of putting its assets up for sale, were being quoted a bit lower Monday.

The parent company's 9 7/8% notes due 2007 were seen down a point at 89.5 bid, and its Century Communications Corp. unit's 8 7/8% notes due 2007 seen down as much as two points in the 117 area.

There was not definitive negative news out that would justify a retreat. If anything, news developments were bullish, with Time Warner Inc. chief executive officer Richard Parsons quoted as telling USA Today that his company remains very much in the hunt for Adelphia, although he qualified that somewhat by saying that Time Warner plans on remaining "disciplined in terms of price."

"Cable is a scale business and we're big cable bulls. I believe in that business. It's a long-term winner," Parsons told USA Today. "I've said, literally from the time I became CEO here, that not only do we like cable, we'd like to get big in it. So the biggest thing out there is Adelphia. We are working cooperatively with Comcast to see if we can figure out a way to be the new home for Adelphia, and we want to take those parts in their system which are adjacent to ours or we think we'd connect well to."

In the USA Today interview, Parsons appeared not to be too concerned with the prospect - first reported last month - that several big private equity firms might pool their capital and attempt to do what TimeWarner and Comcast want to do: buy all of Adelphia for somewhere around $17 billion or $18 billion and then divvy up the assets.

He said that TimeWarner has the financial strength to buy Adelphia, even in the event the private equity players decide to mount a challenge.

"One of the other reasons I like our chances is that we have probably now the strongest balance [sheet] in our sector," Parsons said. "Our debt will be under $17 billion by the end of 2004 and this company is a cash-flow-generating machine. We'll generate between $3 billion and $4 billion of free cash this year."

RCN gains

Among other distressed communications names, a trader saw bankrupt Princeton, N.J.-based telecom operator RCN Corp.'s bonds up a couple [of points]," although he saw no fresh news out on the company.

He saw RCN's 10% and 11% notes two points better at 55 bid, 57 offered, while its 10 1/8% notes and 9.80% notes had moved up from that level to 57 bid, 59 offered.

And a trader saw Pegasus Satellite & Communications Inc.'s 11¼% notes due 2010 firming to 65.75 bid from 64.5 on Friday while its 12½% notes due 2007 rose to 65.5 bid from 64.25. He noted that it had been at least "several months" since the bankrupt Bala Cynwyd, Pa.-based satellite television programming distributors' notes had been seen trading around.

Apart from the communications operators, traders saw little movement, even from the recently resurgent airline sector. Delta Air Lines Inc.'s recently strong bonds were seen essentially unchanged. Delta's benchmark 7.70% notes due 2005 remained at 91 bid, 93 offered, its 7.90% notes due 2009 were at 58 bid, 60 offered, and its 8.30% notes held steady at 44 bid, 46 offered.

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