Collins & Aikman's bonds and bank debt continued to fall last week on further concerns that its asset sales will generate lower than expected proceeds. Its 10 3/4 '11 bonds fell four points to 11. Its term loan "B" dropped to the low 60s from 73 the prior week. "[The company] is in real trouble," said a dealer commenting on the credit.
Collins & Aikman's bonds and bank debt have been on the decline since mid-July, when it forecast it would receive less than it had expected from the sale of assets. "The prognosis on asset sales is murky. People are not comfortable with it," said a trader. He added the company's poor earnings have also spooked the market. Collins & Aikman reported a $25.6 million net loss in June.
The bankrupt auto supplier is selling the assets of its automotive fabric business. It decided in April to exit and unwind most of the business after failing to find a buyer (CIN, 7/6). A spokesman did not return calls.