Collins & Aikman's term loan "B" traded up a couple of points to the 95-97 range after the company confirmed plans of a possible sale or merger of its assets. A trader said asset sales would benefit those holding loans in the bankrupt auto parts maker. He added that hedge funds were the biggest buyers of the bank debt. Collins & Aikman's bonds in contrast took a tumble. Its 10.75% '11 bonds fell to 33 1/4 from 38 1/2.
Frank Macher, president and chief executive of Collins & Aikman, said in a statement that the company has begun to market portions or all of its assets to determine their market value for a potential sale, merger or equity infusion from investors.
"We are in the midst of developing a comprehensive business plan that includes detailed, three-year projections to determine our base value," said Macher in the statement. "From there we will evaluate the benefits of structuring the company as a stand-alone entity or explore the possible sale or merger of our assets to a third party. Ultimately, we will choose the path that creates the most value for our stakeholders." A Collins & Aikman spokesman was unavailable for comment.