A Piece Of Allied Waste Revolver Moves, Dynegy Marches Up
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A Piece Of Allied Waste Revolver Moves, Dynegy Marches Up

Traders suspected that one of the underwriters for Allied Waste Industries' new credit sold a piece of the mammoth $1.5 billion revolver down in the 93 context this week. Market players suggested some of the banks, which signed onto the revolver to win investment banking fees, were now paring down their exposure. Others disagreed. "The bids are there, but I don't see anyone selling there right off the bat. They would certainly lose money on that paper," said one dealer. J.P. Morgan and Citigroup lead the refinancing credit, with UBS Warburg, Credit Suisse First Boston and Deutsche Bank also serving as top tier agents.

The five banks were said to have committed $175-225 million to the revolver and earned managing roles on the company's common stock issuance, three-year mandatory convertible preferred stock deal and 10-year note deal (LMW, 4/6). A banker also said that six out of eight proposed second tier agents accepted the revolver with $100 million commitments at an original issue discount of 98.5 with $750,000 in capital markets compensation fees from the stock and bond deals. Pete Hathaway, senior v.p. of finance, Allied Waste Industries, did not return calls seeking comment.

Dynegy led the rally for energy names this week coming out with a positive first quarter earnings report. The company's "A" loan marched up from the mid 90s into the 97-97 7/8 context. Additionally, the "B" loan was said to be trading in the 96 range up from the low 90s. The company reported a net income of $147 million for the first quarter 2003. Calls to Nick Caruso, Dynegy cfo, were not returned.

Adelphia Communications Corp.'s Century Cable term loan broke into the 80s, up from the mid to high 70s. The paper moved as the market heated up and investors reached down to buy assets. One trader said the many of the Adelphia facilities that have co-borrowing arrangements were getting a second look since Bank of America released a research report on the company in early March. The report suggested that the credits held at these levels would not suffer from any subordination. "If you are not subordinated, then you are covered," he said. He also explained that the paper offered investors yields of more than 15% if the paper is held until the point it is taken out. Adelphia financial officials could not be reached by press time.

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