Dana Corp.'s bonds fell on speculation that a proposed bank deal the company would use to pay off some of its notes may not happen. Its 6.5% '09 bonds fell three points to 76, while its 5.85% '15 bonds dropped two points to 66.
Dana's bonds climbed two to four points at the beginning of the month on rumors of the new bank deal. It is not clear which bank may be leading the loan or why the deal may be scrapped. A Dana spokesman did not return calls by press time.
Last week, Dana postponed a cash dividend on its common stock for the first quarter of 2006 pending completion of the company's fourth quarter and full-year 2005 financial results. In November, the company restated its financial statements for the first and second quarters of 2005, and for the years 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 (CIN, 2/3).