Edison Mission Midwest Holdings' loan has been the talk of the secondary market this week after pieces of the company's credit traded out of the 90s into the 87 - 87 1/2 context following a bank meeting last week. A slightly less than $10 million piece was said to have traded in that range on Tuesday. The details of the bank meeting could not be determined, but there are rumors that a number of banks are looking to sell, which eerily reminds investors of the Mirant Corp. situation, market players noted. Whether or not commercial banks are ready to bail out of the name is in question, one trader said.
Edison Mission Midwest Holdings has $911 million in bank debt coming due in December. The company's management has said it is looking to refinance the debt, but market players are questioning why the company has not taken advantage of issuer-friendly market conditions sooner, explained one trader. Calls to Jo Ann Goddard, v.p. and investor relations at Edison Mission Midwest Holdings' parent company-Edison International, were not returned by press time.
Meanwhile, Wyndham International's bank debt has slumped this week. Traders said the company's "B" loan traded down roughly four points into the 84 1/2 range from the 88 1/4 context where it was moving last week. The pressure on the paper came from market technicals rather than credit fundamentals, the traders explained. There are more sellers than buyers and "storied" names were receiving a dose of pressure this week, one dealer noted.
As the high-yield market continues to receive new supply, there are more options that investors can choose to put their cash to work, the traders said. Par players are mostly filled up on Wyndham and the hedge funds that normally invest in the paper have alternatives, noted one trader. Calls to Judy Hendrick, Wyndham's treasurer, were not returned by press time.