A bankruptcy court judge approved Adelphia Communications' $1.5 billion debtor-in-possession financing plan last Thursday, and traders said the bank debt would be better bid as a result of the approval. The new financing has a provision that allowed the banks on the company's existing facilities to receive $300 million in interest payments. The company's unsecured lenders tried to block the interest payments on the basis that the banks had constructed the loans to the Rigas family that sparked Adelphia's collapse.
As LMW went to press, a solid market for Adelphia's Century Cable credit could not be determined, but one dealer said the paper would rise to the mid-60s if the interest payments were approved. Prior to the approval, the paper was quoted in the low 60s. Calls to Adelphia were not returned by press time.