A $15-20 million piece of Harnischfeger Industries' bank debt traded at 41, softening one point due to the announcement last week that Asia Pulp & Paper had filed for bankruptcy. The buyer and seller could not be determined. The Asian company, which was a customer of Harnischfeger, defaulted on its $200 million receivables contract two years ago. "It's why Harnischfeger ran out of money," said a market player, noting the tie between this situation and the recent announcement by Washington Group that it had financial troubles from Raytheon. "If you're a contractor, you've got to have liquidity,"he said. Harnischfeger, based in St. Francis, Wis., manufactures heavy equipment for the mining industry.
Last month Harnischfeger traded at 42 due to the company's restructuring and rumored escape from Chapter 11 bankruptcy. Dealers also remarked that the company was doing well on its numbers. Harnischfeger has a $750 million facility that breaks down into three tranches. It is priced at 23/4 % over LIBOR. J.P. Morgan Chase leads the deal.