Adelphia Falls As Moody’s Forecasts Bankruptcy

  • 06 Jun 2002
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Small pieces of Adelphia Communications' Century Cable bank debt traded in the Street yesterday, starting the day at 88 and then falling to the 84 3/4 range, after Moody's Investors Service downgraded Adelphia and its operating companies. The ratings agency said the downgrades reflect the recovery values in the face of an "imminent bankruptcy." One dealer said that while market players expect a bankruptcy filing, the downgrades caused vehicles to sell, putting downward pressure on the price.

Dealers also believe the company and its operating subsidiaries will file for bankruptcy. The company is currently in default under its several of its bank agreements after failing to file its 10K. One analyst suggested that a Chapter 11 bankruptcy would help the operating companies work through the liquidity issues facing the company. A bank call was scheduled for two o'clock today, but one trader said he expected the company to ask only for more time. Karen Chrosniak, company spokeswoman, declined to comment on the Moody's report but did confirm that on June 15 the company faces the end of its grace period for several interest payments missed on May 15. She said the company also has additional interest payments due on that date.

  • 06 Jun 2002

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