On news that Kmart might head
into bankruptcy, levels dropped dramatically from 95 to 85 on
Tuesday and then down to 70-75 today, following a third
consecutive ratings downgrade from Fitch to CCC from
BB- on its bank facility. There was conflicting information on
trading volume. Some dealers reported that there were many
trades, but others said no trades had occurred as bids have
been thrown out to test the market.
On the par front, things are looking increasingly
better for Owens-Illinois, which reportedly headed to 99 5/8 to par
on speculation that the company has upsized its expected $500
million bond offering to $1 billion. In addition to the much
anticipated bond deal, which will pay off bank debt, traders noted
that the market thinks the worst of its asbestos litigation
troubles is far behind it.