About $25 million of Adelphia Communications' Century Cable term loan traded at 91 1/2 in retail last week with a $2.5 million trade in the street last Thursday. The credit was rumored to have traded in the high 80s, although most dealers quoted the name in the 90-92 context. The name had been trading in the 93-94 range two weeks ago. A $25 million piece of Adelphia's Hilton Head facility was also believed to have changed hands at around 86. Investors are beginning to trade some of the name's more off-the-run facilities as they gamble on the value of the company's cable assets.
Adelphia released a statement last Thurdsday that said the company has not yet been able to provide audited statements to its subsidiary lending groups due to the continuing review of its financial statements. The company is therefore in potential default on those credit agreements and in most cases has 30 days to remedy the situation.
Two weeks ago the markets buzzed with the idea that Adelphia had yet to file its 10K because its auditors, Deloitte & Touche, were refusing to sign off on the filing. Some investors speculated that zealous buyers trying to cloud the name with doubt and drive down its price started the rumor. Although the company's bonds and equity were believed to take a hit from this notion, no marked difference was seen in the price of the bank debt. A spokeswoman from Deloitte & Touche said that the company is still working on Adelphia's audit, but declined further comment citing client confidentiality. Repeated calls to Karen Chrosniak, Adelphia spokeswoman, were not returned by press time.