Delphi Corp.'s debt rebounded last week after the market came to grips with the company's $1.5 billion drawdown and its relationship with General Motors. The bank debt had recovered to 102.25-102.75 last Thursday after falling a point on news that the company was tapping its bank loan so soon after closing it. The company's 6 1 /2% notes moved up to 79.
When the company tapped its revolver Aug. 5, lenders reacted with surprise and concern. "The ink's not even dry on this deal," one investor said, referring to the credit's June close. "Nobody expected this." Concerns that GM was not willing to step up for the auto parts company, which was a subsidiary of the giant auto maker, subsided last week after an earnings call Monday.
"It's been very volatile, they really drew down a big piece of the revolver and were talking publicly about filing for bankruptcy, so the loan went low," said one investor. "But it bounced in the last couple of days after the earnings call. I think people are more comfortable now." Calls to Delphi were not returned by press time.