McLeodUSA's $615 million "B" loan was active in the last two weeks after dropping 15 points to the 35-38 context. Market players attributed the drop to what has been perceived to be the negative tone of a conference call between company officials and lenders. The company is facing a challenging telecom environment. Some trades took place around 40 and rumors of a trade at 37-38 could not be confirmed. "This is about as low as it has gotten," a trader said.
A trader explained that the debt is quoted widely because it "fell from a cliff. The debt was trading at 49-50, [then after] a bad call, it just dropped like a rock," he noted. "Sellers stayed around 40 and the buyers aren't stepping up yet."
McLeod's credit plummeted during the second half of 2004 and since then has been swirling in the high 40s high 50s context. Last May the debt was quoted in the 70s, but plummeted after the company reported losses and declining revenues (LMW, 10/15). McLeod also has a $110 million exit facility. The company emerged from bankruptcy in April 2002. A McLeod spokeswoman did not return calls.