Levels for Crown Cork & Seal's bank debt were down early last week on news that the company had pulled its spin-off of Constar International, but the paper recovered somewhat on rumors that a refinancing is in the works. Some $10 million of Crown Cork paper traded in the high 80s on the news, and dealers claimed that a lot more than that traded hands.
Crown Cork is rumored to have started talks with its lenders on a $144 million loan due Aug. 4. Whether the obligation would be met through a refinancing or an amendment could not be ascertained. The company also has a $350 million note due Sept. 1. Calls to Alan Rutherford, cfo, were not returned by press time.
Traders said levels initially dipped as much as seven points after the Constar deal was pulled as Crown Cork was planning to use proceeds from the spinoff to pay down debt. The Philadelphia-based consumer packaging company had $5.3 billion in debt on its books at the end of 2001, and the roughly $140 million IPO and $200 million bonds offering in conjunction with Constar's spin-off were a significant part of Crown Cork's plan to reduce debt to $4 billion by year-end.