Dana Bonds Trade Up On Bank Deal Rumor
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Dana Bonds Trade Up On Bank Deal Rumor

Dana Corp.'s 6.50% '08 notes climbed four points to 84 last week on rumblings of a new bank deal the company may draw upon to pay off the '08 bonds.

Dana Corp.'s 6.50% '08 notes climbed four points to 84 last week on rumblings of a new bank deal the company may draw upon to pay off the '08 bonds. Its 6.50% '09 bonds also climbed a couple of points to 79.

It is unclear which bank might be leading a potential deal. A spokesperson at Dana did not return calls. A trader said that Citigroup, which leads Dana's revolving credit facility, is not involved in the deal. A Citigroup spokeswoman did not return calls. The bonds traded up despite Dana's announcement in a Securities and Exchange Commission filing that the SEC has issued a formal order of investigation related to the company's financial restatements.

Dana reported last September that it had hired outside counsel to investigate accounting matters arising from incorrect entries related to a customer agreement in its commercial vehicle business unit. In November, the company restated its financial statements for the first and second quarters of 2005, and for the years of 2002 through 2004. Dana reported a $1.274 billion net loss in the third quarter of 2005. Dana blamed the majority of the loss on the provision of a valuation allowance against its net U.S. deferred tax assets in the third quarter, according to a company release.

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