Kmart Tanks As Owens-Illinois Gains Strength
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.