Outsourcing Solutions Jumps; Loral Holds After Satellite Failure

  • 24 Sep 2003
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The bank debt for the bankrupt OutsourcingSolutions is beginning to regain ground in the secondary market. Market players said the name traded as high as 56-57 this week after being quoted by LoanX in the mid 40s last week. It could not be determined if any trades were completed at last week's levels. The company is said to be winding up bankruptcy proceedings with a confirmation hearing set for Sept. 30. About 80% of the bank group is committed to the reorganization plan at this point, noted one trader. Calls to Gary Weller, corporate executive v.p. and cfo of Outsourcing Solutions, were not returned.

Loral Space & Communications' bank debt held steady this week although the company reported a malfunction on its Telstar 4 satellite. Market players said Loral's bank debt maintained its 96 -98 levels, despite announcements that the satellite is no longer operational. Telstar 4 was one of the six satellites slated to be sold to Intelsat for up to $1.1 billion in cash as a part of Loral's reorganization plan. Proceeds from this sale are earmarked to repay lenders with $959 million of outstanding secured bank debt claims. Loral still expects the satellite sale to be completed in a timely manner, according to a company statement. But the purchase price for the sale will be reduced by proceeds from insurance on the satellite. Telstar 4 was insured for $141 million. Calls to a Loral spokesperson and an attorney representing Intelsat were not returned.

Meanwhile, CharterCommunications' operating company "B" loan traded as high as the 95 1/4 range before settling down to the 94 - 95 context following the company's announcement that it is pursuing a debt exchange. Charter and its indirect subsidiary CCH II have entered into agreements to purchase an aggregate of $609 million in convertible senior notes and $1.3 billion of senior notes and senior discount notes in private transactions with a number of institutional investors. CCH II will issue an aggregate of $1.6 billion principal amount of 10 1/4% notes due 2010 to support the exchange.

Charter has also entered into an agreement to sell a various cable television systems to AtlanticBroadband for about $765 million. The planned asset sale will provide for $3,200 per subscriber, said one trader. The proceeds from the sale, $91 million from a previous asset sale, as well as the $300 million of debt discount for the exchange have allowed the company to raise $1.1 billion for debt reduction, explained CarlVogel, Charter's president and ceo, in a conference call last Friday. It could not be determined if bank debt holders would receive any paydowns from the recent transactions. The bank debt is certainly not performing in a way that indicates the market expects a paydown, said one buysider. Calls to a company spokesman were not returned by press time.

  • 24 Sep 2003

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1 BNP Paribas 14,443 29 18.07
2 Bank of America Merrill Lynch (BAML) 8,264 27 10.34
3 Lloyds Bank 7,329 24 9.17
4 Citi 6,748 19 8.44
5 JP Morgan 5,220 8 6.53

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5 Credit Suisse 69,442.99 183 6.55%