Exide bonds, shares jump in high volume trading, rumor of facility status change

Bonds and shares of Exide Technologies surged in high-volume trading today without fresh news out of the bankruptcy court. Indeed, just after 1:00 p.m. EDT both classes of securities were actively bid higher, with XIDE shares at one point up nearly 6%, at $0.26 per share, before settling in for about a 3% gain, at $0.25 per share. Over six million shares changed hands, versus the average daily volume of 4.2 million over the trailing three months, trade data show.

In the high-yield secondary market, Exide 8.625% secured notes due 2018 had been bouncing around in a 62 context this morning, which was unchanged from Friday but up from whipsaw trading from 50-60 one week ago on the bankruptcy filing. Here, too, volume surged after about 1:00 p.m. EDT, with prints at 67 and 68 on the way up to 70 most recently, trade data show.

Annual results were out Friday afternoon, however it was just a 10-K filing since the company on June 10 publicly reported preliminary results. The trading action flags typical supply-and-demand market dynamics on debt held closely by parties involved in the case, however there is also a rumor spreading that a judge in California is expected to allow Exide to reopen a battery-recycling facility that had been shut down due to toxic-waste output, according to sources.

At a hearing on the issue on Monday, June 3, lawyers for Exide argued that the closure of the plant in Vernon, Calif., was tied to pollution data from December 2012 and that the company had since reduced pollution, according to a summary report by Independent Credit Research. Thus, the accusations of pollution by the Department of Toxic Substances Control are misleading, the report shows. – Staff reports

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