The bank debt for Allegiance Telecom was moving up as LMW went to press after reports suggested that Qwest Communications International would buy the company out of bankruptcy for about $350 million in cash and assumed debt. The bank debt had been quoted around the 93 level prior to the news, but afterward the debt was quoted in the 94-97 range. No trades could be confirmed. One trader said that the bonds were also up about four points. People are assuming that the bank debt is going to get paid down or assumed by Qwest, said another trader.
Andrew Albrecht , v.p. of investor relations, pointed to the company's recent 10-Q filing, which states, "The company has been in discussions with various third parties who may be interested in purchasing some or all of the company through the bankruptcy process, either through a 363 sale (a sale pursuant to Section 363 of Chapter 11 of the Bankruptcy Code) or in connection with a plan of reorganization." Over the last month-and-a-half, the bank debt has climbed out of the low 90s on speculation that a buyer may be interested in assets of the competitive local exchange carrier. The company has just under $500 million in bank debt outstanding.