Tenneco Automotive's debt traded up to the 75-77 range from 74 early last week on the announcement of better numbers. Approximately $20 million changed hands, but buyers and sellers could not be ascertained. On Oct. 25, the company announced it has continued to successfully generate cash and reduce its debt by $111 million in the third quarter. Officials noted they are encouraged by improving aftermarket margins. Traders said the auto sector continues to struggle, so any positive announcements tend to get a reaction in the market. Tenneco is an auto parts maker based in Lake Forest, Ill. Calls to Mark McCollum, cfo, were referred to treasurer Paul Novas, who did not return them.
The company also announced a plan to control costs in the short-term, as well as longer-term fundamental changes to manufacturing, distribution, and supply chain operations. The company has developed initiatives aimed at addressing standardization and efficiency as well as better aligning of organizational and future market needs. Tenneco has a $1.466 billion deal that breaks down into four tranches and expires in 2005. J.P. Morgan, Commerzbank, Salomon Smith Barney, and Bank of America are the lead arrangers. Pricing ranges from LIBOR plus 3 1/4 % to LIBOR plus 4%.