Polymer Group Strengthens With Results

Stronger third quarter results propped the bank debt for the Polymer Group right under par with at least one trade confirmed at the 99 1/2 level.

  • 23 Nov 2003
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Stronger third quarter results propped the bank debt for the Polymer Groupright under par with at least one trade confirmed at the 99 1/2 level. Earlier in the week, the name had been quoted wide in the 97 1/2-par range. "PGI has been taking a number of steps this year to stabilize the business," said Dennis Norman, v.p., strategic planning & communication. Operating income for Polymer Group was $8.9 million in the third quarter compared to $5.1 million in the same period last year.
 
The company emerged from bankruptcy on March 5, restructuring its bank debt into a new facility without paring down senior creditor claims. "The senior debt holders were kept at 100 cents on the dollar," explained Norman. The company had about $418 million in senior debt by the end of the third quarter.
 
Polymer Group has a special program with MatlinPatterson Global Opportunities Partnerswhereby, in the event the company is unable to meet certain covenants under its credit facility, Polymer will be able to tap a $25 million letters of credit facility provided by the firm to repay debt under the credit facility. MatlinPatterson owns roughly two-thirds of Polymer's stock. "In support of the company they offered the $25 million letters of credit," Norman explained. If Polymer Group needed to draw on the letters of credit, the money would be used to pre-pay the senior lenders. MatlinPatterson would then be entitled to 10% in senior subordinated notes due 2007 equal to the amount drawn under that facility.
 
 
 
 
  • 23 Nov 2003

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