Auto supplier Intermet Corp.’s 9 3/4% notes of ’09 dropped a whopping 35 points last week, from 75 to 40, following disappointing earnings due to higher steel costs and the company’s announcement that it will violate bank covenants at the end of the month. “. They’ll probably get one until Dec. 15,” said one distressed analyst, referring to a waiver from banks in its lending group.
The analyst noted while high steel prices have certainly been contributing to Intermet’s troubles, other factors including basic operating inefficiencies have added to the auto supplier’s financial woes.
