A struggle between lenders to
bondholders who have taken a position in the company's bank debt is
holding up a credit restructuring and prompting traders to take
bets on the outcome. Dealers said $20 million had traded in the 90
range and was quoted at 89-91 in the Street, as par desks started
to slide down market to get into the action.
The company is offering to give collateral to all
the arrangers and raising the coupon in exchange for extended
maturity. "They're waiting to get approval [on the extension]. The
banks will get security interest in return," a trader said. The
company, based in Toledo, Ohio, is one of the largest glass
manufacturers. A company spokesman did not return calls for
Pricing had been previously announced at LIBOR
%, and there was speculation that there would be a further uptick
in pricing. The changes were supposed to be made in mid-March.
"They did not get approval. The bond holders are trying to hold it
up because they don't want the banks to get ahead of them," said a
trader familiar with the process. "The [renewal] will probably
close soon, but I doubt it will with the structure they have
While levels for asbestos-related names had
plummeted late last year, a more active market and debt
restructuring for some companies has helped these names inch back
up. Dealers say Owens-Illinois has managed to overcome its asbestos
ties better than the other names because of a strong business.
However, one dealer was skeptical that the company would get an
extension on its maturity. "It's not getting done," he predicted.
"No deal has been consummated." The company has a $7 billion credit
facility which breaks down into two tranches. Pricing is LIBOR plus
Deutsche Bank, Bank of Nova
are the lead arrangers, according
to Capital DATA Loanware.