Allegheny Energy made a move from 101 to nearly 102 in trading as a number of energy and wireless names moved higher. Dynegy Holdings' "B" loan was seen at 101 3/4-102 1/4 and Centerpoint Energy's "B" was said to be offered at 102-102 1/2. One trader explained that the names all caught a bid as they offer a higher coupon than other paper in the market and after investors placed a couple of big trades it left the dealers short.
Wireless names such as Nextel Partners, Centennial Cellular and Dobson Communications also edged up. Cent Cell and Dobson were trading at 100 1/2 and 100 1/4, respectively last week. By midweek, Cent Cell had edged to 100 3/4-101 1/4, said traders. Nextel Partners was trading as high as 101 7/8, a trader added.
A host of names also broke into the secondary market. The $225 million "B" loan for BWAY broke at 101 5/8-7/8, and Coinstar broke at 101. "No one is selling," traders said. According to one loan market participant, more than 70% of all institutional loans are trading over par, and 30% of all loans in the market are over 101. Since many of these loans do not have call protection, there is potential for a number of investors to be burned.