Interstate Bakeries Corp. has maintained its par plus levels despite the company's recent quarterly loss projections and a downgrade from Moody's Investors Service. Traders said the name was hovering around par with the "B" loan quoted in the 100-1001/2 context. The paper slipped less than half a point over the last couple of weeks, according to Mark It/LoanX. But market participants are still watching the name. "The company makes Twinkies in a world of Atkins," said one buysider, explaining his concern.
Moody's downgraded the company's bank debt from Ba2 to B1 last week. The company has a $300 million revolver, a $291 million "A" term loan, a $122 million "B" piece, and a $99 million "C" loan. Moody's notes that the downgrade comes with weaker-than-expected performance and the challenges of turning the company around in a industry with excess capacity and weak category trend demands. Interstate Bakeries also has relatively tight covenants on the revolver and a significant amortization over the next year. Paul Yarick, senior v.p., finance and treasurer of Interstate Bakeries, did not return calls by press time