First Commercial Bank is believed to be the seller in a $23 million auction of Federal-Mogul at 69 Wednesday as market players anticipate coming resolutions to the company's asbestos liabilities. The name traded as high as 66 before slinking back into the 62-63 range three weeks ago following reports that Carl Icahn and other bondholders struck a deal with asbestos claimants. It is still unknown exactly how the bank debt will be restructured as negotiations continue, but investors are looking for value in near-term resolutions, explained one dealer.
Reports suggest that the bondholders might try to get the bankruptcy court to rescind the collateral liens that bank lenders have to the company's assets. Federal-Mogul has issued a statement that it has not agreed to any plan. Calls to G. Michael Lynch, executive v.p. and cfo, were referred to a spokeswoman who did not return calls by press time.