TWA Trading Halt Has Analysts Puzzled

Trans World Airlines’ securities have not traded for more than a week on the American Stock Exchange because of a trading halt that has some analysts puzzled.

“I have been extremely perplexed” by the long delay, said Phillip Brannon, who follows TWA’s debt for Mabon Securities Inc. in New York.

TWA’s voting-trust certificates, preferred stock and two series of its senior notes last traded Nov. 1 on the Amex. (The certificates, which last traded at $1.875 apiece, are equivalent to common stock held in trust and eventually are to be converted to common shares.)

On Nov. 2, the Amex halted trading because there was “news pending” from the St. Louis-based airline. That’s not uncommon. Markets frequently halt trading briefly so corporate news can be assimilated by traders.

TWA then issued a statement updating negotiations between the airline and its creditors on a plan to restructure the struggling carrier’s debt. But the trading halt remained.

On Thursday, Amex spokesman Tom Mariam continued to cite pending news for why TWA had not resumed trading. He declined to elaborate.

TWA spokesman Don Fleming said the Amex wants more information about the debt negotiations before allowing trading to resume. But that’s clashing with TWA’s need to keep the talks’ details confidential until an agreement is reached, he said.

“We’re trying to meet the (exchange) requirements without compromising that,” Fleming said.

But Brannon said companies routinely engage in restructuring talks while their securities keep trading, as long as investors are informed that the talks are occurring.

“I don’t remember another trading halt of such length when the underlying situation was already so clearly understood,” he said.