Reliant Resources Softens
Reliant Resources' bank loan was a touch weaker as market players in both the bank loan and bond markets pursued relative-value plays last week.
Reliant Resources' bank loan was a touch weaker as market players in both the bank loan and bond markets pursued relative-value plays last week. The paper was said to have been trading in the 971/2-981/2 range down from recent highs in the 981/4-99 context. Traders said investors were looking to the company's bonds, which have a longer tenor and currently carry a better yield. There was also a rumor that some banks could be looking to lighten up their exposure to the company's bank debt.
One dealer noted that the price for Reliant bonds also recently softened as investors sold out of the paper in order to take advantage of AES Corp.'s offering of $500 million of unsecured senior notes. New debt issues from Allegheny Energy and Calpine Generating Company also put pressure on Reliant. Calls to Dennis Barber, Reliant's director of investor relations, were not returned by press time.