Approximately $30 million of Global Crossing's bank debt changed hands last week as levels slid from the low 40's to 23-26, with distressed players stepping up following the company's Chapter 11 bankruptcy filing last Monday. The picture brightened somewhat on speculation that $360 million in cash, received in December from the sale of the company'sIPC Trading Systems units to an investment group led by Goldman Sachs Capital Partners, is sitting in an escrow account waiting to be distributed to creditors. A spokeswoman from Global Crossing could not confirm the possibility of an escrow account or a debtor-in-possession credit in the mix.
Some bond traders claimed the company's bonds are pari passu with the bank debt, but bank traders adamantly denied the suggestion. John Page, a Moody's Investors Service analyst, would not comment on the position of the bonds in the capital structure, although he did verify that the bank loans are secured by stock of the operating assets, whereas the bonds are not. "It is a better position from a claim perspective," said Page of the secured bank loans. With commitments for a $750 million cash injection from Hutchison Whampoa and Singapore Technologies Telemedia, creditors are unsure what the trade payables will be or how diluted their claims will become.