Ready To Wear?
Levi Strauss & Co. saw its 12 1/4% notes of '12 trade up to five points to as high as 82. Traders mentioned the increase was due to scattered rumors that Levi's might be bought by Warren Buffett's Berkshire Hathaway. One trader noted that the holding company owns part of Fruit of the Loom and Buffett may be interested in buying another textile concern.
Mile High Climb
Denver-based Westport Resources' 8 1/4% of '11 traded up to 115.5 last Wednesday after the company said energy explorer Kerr-McGee would acquire it for $3.4 billion, including the assumption of Westport's $981 million in debt. The merger will create one of the largest independent oil and gas companies in the U.S. Paul Harvey, analyst at Standard & Poor's, said Westport is being merged into a stronger, higher-rated company and that is what caused the rating agency to put its bonds on positive watch. S&P currently rates Westport double-B, with a positive watch, while Kerr-McGee is triple-B and on negative watch following the merger plans.
El Paso's 7 5/8% notes of '08 moved up one point to 89.5 late in the week. One portfolio manager attributed the move to a decrease in El Paso's headline risk. However, oil and gas analyst Paul Kern at Thrivent Financial for Lutherans in Minneapolis, said the rise was merely part of the broader market's stronger tone.