Trading volume was heavy on Refco's bank loan last week after a news report that the company held offshore accounts with $525 million in fake bonds. The bond accounts were reportedly at Refco's Bermuda-based unit, according to a Bloomberg report. Refco's term loan "B" was down a point to 98 1/2. The loan had been trading slightly north of par at the end of last month. Its bonds fell five-and-a-half points to 51.
Refco officials would not comment. Last week, a U.S. federal bankruptcy court ruled that Refco's offshore broker-dealer unit should liquidate its assets. The company filed for bankruptcy in October last year after former CEO Phillip Bennett was suspended from the company under allegations of securities fraud.