Owens Corning Bonds Jump On Equity Payoff

Owens Corning's bonds jumped 20 points on the announcement that its bondholders will receive equity in the company when it emerges from bankruptcy.

  • 12 May 2006
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Owens Corning's bonds jumped 20 points on the announcement that its bondholders will receive equity in the company when it emerges from bankruptcy. As first reported on Credit Investment News' Web site last week, Owens Corning's 7.5% '18 bonds climbed 21 points to 121, its 7.7% '08 bonds were up 20 points to 119. The bank debt dipped a point to 155 1/2.

Owens Corning announced May 10 that it had reached an agreement with creditors on the terms of a Chapter 11 reorganization, its sixth plan since the company filed for bankruptcy in October 2000. This is the first plan that all creditors have agreed to, said a spokesman. If confirmed by the bankruptcy court, the plan paves the way for the company to emerge from bankruptcy later this year.

Bondholders would receive 26.6 million shares in the reorganized company's common stock. They will also have the right to buy a pro rata share of 72.9 million shares of the reorganized company's common stock at $30 a share through an equity rights offering. Bank creditors would receive full recovery, amounting to $2.276 billion in cash, plus interest calculated as of March 31, 2006.

A trader said the bank debt did not move much in trading because it was anticipated that bank creditors would receive a full recovery. The equity rights offering to bondholders is much more of an incentive to make an investment in the company, he said.

  • 12 May 2006

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 BNP Paribas 5,997 17 15.40
2 Citi 4,679 16 12.02
3 Lloyds Bank 3,158 6 8.11
4 Bank of America Merrill Lynch (BAML) 3,104 10 7.97
5 Morgan Stanley 3,066 8 7.88

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 69,085.90 230 10.56%
2 JPMorgan 63,371.79 193 9.69%
3 Wells Fargo Securities 50,770.30 154 7.76%
4 Bank of America Merrill Lynch 50,061.19 163 7.66%
5 Credit Suisse 45,499.96 141 6.96%