The bank debt of U.S. Can is said to have traded last Tuesday at the 82 level, continuing the downward trend that the paper has experienced over the past couple of months. Market players attributed the latest drop to investors spooked by the resignation of U.S. Can CEO Paul Jones. Earlier last week, market sources had quoted the market for the name anywhere from the mid- to high 80s to the 76-80 range.
A company statement said Jones left to pursue other professional and personal opportunities, but one dealer noted that the response to the announcement was much like investors' reaction to Charter Communications' announcement that it had placed its chief operating officer on paid leave. In both cases, the bank debt tumbled. Calls to John Workman, coo, and Sandra Vollman, senior v.p. of finance, were not returned by press time.
One trader noted that U.S. Can is facing a number of issues, including high leverage. The steel container manufacturer currently is in the midst of pursuing restructuring programs designed to streamline operations and reduce costs. A recent Standard &Poor's report stated that, due to these efforts, profitability is likely to improve in 2003. The report also noted that although "liquidity is sufficient to meet near-term needs, debt maturities are meaningful in the intermediate term."