Two auctions last week $20 million sales of each produced Huntsman Corp.'s pro rata paper, pushing levels up from the 66 range to 69. Dealers noted the surge in levels from 50 a month ago, but were unsure of what's supporting the levels other than the recent bond deal announcement by Lyondell (LMW, 11/25). J. Kimo Esplin, cfo of Huntsman Corp., could not be reached by press time.
Dealers believe the sellers were original holders. "They were looking at the cost-benefit equation vs. the benefit of working it out and realized it was worth selling at this price," a trader explained. He added that a level like the high 60s is often a deciding point for holders who are trying to predict which way the paper will trend. Details on the buyers of the paper could not be ascertained.
Another dealer theorized that the auction was put in place due to anxiety from holders that a new deal in the pipeline from Deutsche Bank will be senior to the existing debt. Ted Meyer, spokesman at Deutsche Bank, confirmed the bank is involved in a refinancing with Huntsman Corp. and committed $150 million on Nov. 29.