Global Tumbles As Par Market Dips
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Global Tumbles As Par Market Dips

Global Crossing tumbled from the low 40s to the 31-32 range by mid-week after the company declared bankruptcy. There was talk in the market that the bank debt was trading above the bonds because of perceived upside relating to the companyÕs sale of IPC Trading Systems to Goldman Sachs Capital Partners. Some suspect profits from the sale, which are reportedly in an escrow account, may be used to pay down the bank debt. Other dealers denied those rumors, explaining the bank debt is senior to the bonds.

Activity on the par side was calmer as only small pieces traded, according to dealers. But levels were falling as one trader said, "Everything is going down." He associated the downturn with a general skittishness ricocheting from the equity markets, while others believed market-wide accounting issues to be the dark cloud. Allied Waste dropped from 99 1/4 to 98 1/2, and Rite Aid slouched to around 98 from 99-100.

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