Owens Corning continued to climb as expectations that the U.S. Court of Appeals for the Third Circuit would overturn Judge John Fullam's decision on substantive consolidation increase. Owens Corning traded as high as 109-110. "The debt has been trading in big slides," a dealer noted. "It traded up from 100 to 109, went down to 107. This week it has gone up to 107 1/2-109 1/2."
Three weeks ago, Owens Corning's bank debt jumped 16 points, climbing to 107 1/2-108 1/2 after the oral arguments in the appeal against the ruling on substantive consolidation were presented in front of a three-judge panel in Philadelphia (LMW, 2/14). "Based on the tone of the questions and the substance of the arguments, we felt very, very comfortable with the fact that the Third Circuit would likely overturn Judge Fullam's decision," a source familiar with the lender group said at the time. Last October, Judge Fullam controversially ruled that Owens Corning assets and debt would be consolidated under one entity affecting $1.6 billion of bank debt (10/12). A spokesman for Owens Corning did not return calls.