The secondary market was light last week, reflecting a busy new issue calendar. Some notable movers came from the distressed market as well as from companies with new deals in the works. Here is selected action.
Hungry For FiberMark
FiberMark Inc., a manufacturer of cloth and paper products, saw its 10 3/4% notes of '11 inch up a few points to trade at 57. The increase came after the company filed for Chapter 11 protection, putting its bonds on the radar screen of distressed buyers. One investor said others are betting that the recovery value of FiberMark after restructuring is going to be higher on a discount value basis, which is leading to increased demand for the paper.
Solutia Shines, Finally
Solutia Corp., a distressed chemical company, had its 6.72% notes of '37 increase from roughly 37 to 41. Traders said the gains occurred after an operating report came out that was in-line to slightly better-than-expected. The report reversed a downward spiral that Solutia bonds had been in for several months since it filed for bankruptcy protection after failing to reach agreements with Monsanto Co. on legacy liabilities (BW, 12/21).
Charting A Course Higher
Charter Communications '11 1/8% notes of '11 moved from 86 to 88 after the company announced it would offer $1.5 billion in new debt to refinance the bank debt of three other subsidiaries, according to traders. The telecommunications company also announced plans to restructure the bank debt of three operating subsidiaries, which bodes well for senior unsecured noteholders and led to the move higher.