Dealers were sharply divided last week on where Safety Kleen's bank debt has traded, or whether there had been any trades at all, with some dealers saying there were attempts to talk down the levels in order to buy the debt. While there were reports early in the week of a trade at 32, one dealer said there were no trades and that the bid was firm at 33. "People want to buy it. There are 33 bids all over," he said, adding that the market is 33-36. "It might come down. People want it to go in the 20s." The attraction, he predicts, is that the debt will move beyond a 33-36 level on better industry conditions. Safety Kleen, based in Columbia, S.C., picks up, disposes and treats industrial and commercial waste.
Safety Kleen's debt traded at 42 1/2 early this month at an auction, before trading down upon dealers noting a lot of uncertainty surrounding the company's financial standing (LMW, 7/1). The company has a $1.6 billion deal that expires in 2007 and breaks down into five tranches. Pricing ranges from LIBOR plus 2 1/2 % to LIBOR plus 3%. J.P. Morgan and CIBC World Markets are the lead arrangers.