Investors didn't shy away from the bank debt of Qwest Communications International despite the announcement that the Denver telecommunications company incorrectly accounted for more than $1.1 billion in transactions. Early last week, traders said $5 million and $10 million pieces traded into the buyside in the high 60s. But with Qwest's bonds on the decline, traders said the paper had sunk to the 55-60 range by midweek.
Qwest announced last Tuesday night that it had incorrectly accounted for $1.1 billion of transactions between 1999 and 2001 and that the problem might extend beyond the sale of fiber-optic capacity, where most of the scrutiny had been focused lately. Qwest had already been weighing a restatement of about $1 billion, but the question is how its lenders will react to the possibility that the company may have violated covenants due to the accounting irregularities. Calls to Qwest's corporate offices were not returned.