Blue Light Climbs, WorldCom Sinks

  • 29 Jan 2003
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Kmart's bank debt climbed up after the company released its plan of reorganization that estimated pre-petition lenders with $1.08 billion claims would receive roughly 40 cents on the dollar for their commitments. The bank debt was said to have traded in the 36 context, before ticking up to the 37-39 range with a few pieces changing hands. According to the bankruptcy documents, the plan represents a "compromise and settlement" regarding lender claims to guarantees provided by certain Kmart affiliates. The plan calls for the lenders to receive cash in lieu of equity in the reorganized company. "We believe that we have the general support of all the parties," said Ron Hutchison, Kmart's chief restructuring officer. A large portion of the cash distribution to the bank lenders will be provided by an investment by ESL Investments and Third Avenue Trust.

WorldCom's bank debt levels sunk even further this week, although no trades could be confirmed. Bank debt players said bids for the name sunk as low as the 19 level before rebounding into the 21-23 range. The reason for the drop, traders said, was purely technical with buyers lowering their price because of a number of sellers in the market. "Once there is the perception of [sellers], bids will back off," noted one banker. Other market players re-emphasized that bids for the bankrupt telecom fell on a weaker outlook for AT&T. Last week, the bank debt levels followed the bonds from the 26 range down to the 23 context. A spokeswoman for the company declined to comment.

Xerox's bank debt's dipped a couple of points on Monday due to concerns of weak results from the company as well as a softer market in general. The company's revolver was said to have traded in the high 80s. Levels for the paper have since improved after the company released decent numbers, explained one trader. By midweek, the company's revolver was quoted in the 90-91 context, according to LoanX. Calls to Lawrence Zimmerman, Xerox cfo, were not returned.

Crown Cork & Seal has been active this week in anticipation of a refinancing. The market for the name has ticked up to the 97-98 range from the 92-93 range, where it was quoted last month. "It's a good solid credit, but some people just don't do the asbestos game," noted one dealer. Timothy Donahue, Crown Cork & Seal senior v.p. of finance, could not be reached for comment.

  • 29 Jan 2003

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 7,026 25 11.95
2 Citi 6,449 21 10.96
3 BNP Paribas 5,093 18 8.66
4 Barclays 4,040 11 6.87
5 Lloyds Bank 3,615 14 6.15

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 1,505.59 4 13.16%
2 SG Corporate & Investment Banking 1,292.64 1 11.30%
2 Rabobank 1,292.64 1 11.30%
4 Wells Fargo Securities 942.61 3 8.24%
5 Mizuho 875.48 2 7.65%