Fleming Companies bank debt has recovered slightly since the company hosted a bank call a week last Friday. A piece of the term loan traded in the 92 context up from the 85-90 range, where it fell two weeks ago. Market players said the call helped to calm lenders by assuring them that Fleming's liquidity situation is not as dire as some expected and that management was still pursuing steps to delever via asset sales. Moreover, rumors suggest that there is still an asset-based lender, possibly General Electric Capital Corp., on the periphery that will step up with some new money. Calls to GECC were not returned by press time.
Concerns do linger for Fleming, particularly the outcome of Securities and Exchange Commission's investigations into the company's books. "When the SEC is in there, a prudent investment decision is to expect the worst," noted one buysider. Still, Fleming is staying current on its interest obligations with a $4 million payout to the company's convertible note holders last week, noted traders. Calls to Mark Shapiro, senior v.p. of finance and operations control, were not returned by press time.