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Kmart Continues To Drop On Weak Results

28 Sep 2002

Levels for Kmart's bank debt continued to plummet after the company released second quarter financial results on Sept. 16. Traders quoted the paper in the 27-31 range last week, down from a wide bid-ask spread of 30-40 two weeks ago, and one dealer noted that a small piece of the company's bank debt had traded around the 28 level.

Kmart announced a net loss of $333 million in the second quarter of 2002, excluding non-comparable items, discontinued operations and reorganization items. The company also said that its net sales for the 13-week period ending July 31, 2002 decreased by more than 15% compared to last year. At the end of August, however, Kmart still had $830 million in cash and full availability under its $1.5 billion debtor-in-possession credit facility. Calls to Albert Koch, cfo, were referred to a spokesman, who did not return calls by press time.

Kmart's bank debt began dropping after the company filed a motion to amend its DIP facility in mid-August. Previously, the paper had settled into the 60s.

28 Sep 2002