Conseco's bank debt has traded up to the 101-102 context this week, beginning with a flurry of paper changing hands in the 99 range. Dealers were divided on what spurred the uptick, with one suggesting that the name was moving up due to accrued interest on the bank debt. Another suggested the paper traded higher due to valuations on the preferred equity, which lenders will receive as a part of their recovery plan.
Conseco is currently wrapping up its bankruptcy proceedings. One of the biggest issues in the case is the appropriate valuation assigned to the company with holders of Conseco's trust originated preferred securities alleging that the company is worth more. Hearings on the matter have wrapped up, but the bankruptcy court judge is reportedly going to make a decision in approximately two weeks. Daniel Murphy, senior v.p. and treasurer of Conseco, could not be reached for comment and a spokesman did not return calls by press time.
Meanwhile, Rural Cellular Corp. ticked up to the 98-100 range after the company announced that it would use the proceeds from a $325 million note issue and cash on hand to reduce its credit facility by $356.1 million. No trades could be confirmed. As of March 31, Rural Cellular had about $746 million in outstanding bank debt across its multi-tranche facility, according to the company's May 14 10-Q. Questions for Wesley Schultz, executive v.p. and cfo of Rural Cellular, were referred to his assistant who did not return calls by press time.