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Distressed Investors Move In On Collins & Aikman

28 Jun 2005

Distressed debt investors swooped down on Collins & Aikman's debt after the bank loans took a massive dive late last week. Traders reported that the $470 million "B" loan was at 74-76, up two points from Friday's bid.

Distressed debt investors swooped down on Collins & Aikman's debt after the bank loans took a massive dive late last week. Traders reported that the $470 million "B" loan was at 74-76, up two points from Friday's bid.

The major action took place at the end of last week following a private lender call. According to a trader, lenders were told the EBITDA numbers were moving lower. This caused the debt to fall from 91 3/8-93 3/8 to 72. The company also has $915 million in senior and subordinated bonds. The company's 10 3/4 '11 notes are bid at 26 1/2. This is 17 points below the auction held by Markit Group and Creditex earlier this month to settle Credit Default Swap index trades referencing the debt.

There were also rumors that the company, owned by Heartland Industrial Partners, would miss a DIP payment, but a spokesman for the company responded that there have been no missed payments. The next payment is due the first of this month, he noted. He could not comment on whether it will be made.

The plastic auto-parts manufacturer filed for bankruptcy in May. JPMorgan has provided a $300 million debtor-in-possession financing. JPMorgan, Credit Suisse First Boston and Deutsche Bank lead the plastic auto-parts manufacturer's pre-petition bank debt, which also includes a $105 million revolver and a $170 million supplementary revolver.
28 Jun 2005