Asbestos Weighs Down Owens Corning
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Asbestos Weighs Down Owens Corning

Owens Corning's bank debt was a few points lower this week after the company filed its plan of reorganization and a couple of lenders were looking to unload the name. A $20 million piece was believed to have changed hands around the 63 1/2 level early in the week and a $5 million piece was said to have traded at 64 1/4 later. Neither trade could be confirmed. The name was softer after the company filed its reorganization plan because asbestos liabilities were larger than expected, according to traders.

The reorganization plan provided for $16 billion in asbestos liabilities, a company spokesman said. He also noted that proposed allowance to asbestos liabilities outstripped the value of the bank and bond debt and reduced the overall estate. A disclosure statement is set to be filed on Feb. 28, but there is no current date for emergence from Chapter 11. According to the reorganization plan, bank debt holders are among the creditors that will be impaired. Currently, lenders are slated to receive cash, a portion of new senior notes, common stock, and a percentage of litigation trust recoveries.

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