Adelphia Communications bank debt has been highly volatile following the company's filing of a proposed plan of reorganization, which included a clause indicating that no distributions will be made to pre-petition lenders until litigation against the lenders is resolved. "The current plan anticipates that only allowed claims are paid out upon emergence and we would have to either settle, reduce or resolve those claims in order for the pre-petition bank lenders to be paid," explained Vanessa Wittman, Adelphia cfo, during a conference call.
Dealers and buysiders said the Century Cable "old" term loan was quoted anywhere from the 94 1/4-97 1/2 throughout the day. The Century Cable facility is one of the facilities that a Rigas co-borrowing relationship is attached. The other co-borrowing facilities include the Olympus bank claims and UCA bank claims. Bank of America, Bank of Montreal, and Wachovia Bank are the administrative agents on the three co-borrowing facilities.
Under Adelphia's disclosure statement, however, bank debt holders are slated to receive cash in the full amount of their claims against the company and are therefore not entitled to a vote.
One of the outstanding claims affecting the banks includes the litigation by the Official Committee of Unsecured Creditors. The complaint alleges that bank debt holders knew of, or recklessly disregarded, the fraud committed by the Rigas family, particularly in regard to the co-borrowing arrangements the family had with various corporate credit facilities. Calls to an Adelphia spokesperson were not returned.
Meanwhile, relatively off-the run names such as Spiegel and Exelon Corp.'s "Exelon Boston" were spotted trading in size this week. Traders said more than $50 million of Speigel was auctioned off in the high 50s context and a $40 million piece of "Exelon Boston" facility traded in the low 70s. The motives behind these trades could not be determined by press time.