Federal-Mogul Corp.'s bank debt was said to be actively trading in the 91-92 context after the company filed its disclosure statement and plan of reorganization. The name is believed to have topped that mark earlier this year, however, after being pushed up by hungry buyers in the secondary market.
Federal-Mogul's plan of reorganization essentially follows guidelines established under an agreement in principal that the company put in place over a year ago. The plan provides for the pre-petition lenders with about $1.6 billion in allowed claims to receive $1.3 billion in term loans and $300 million in junior secured paid-in-kind notes. J.P. Morgan is the administrative agent for the loan.
The term loan is slated to provide lenders with 81 cents of value and the pay-in-kind notes are set to provide 19 cents, but traders said the market value of the package is more appropriately considered in the 95-96 range. Federal-Mogul has not ticked up that high because the price is still incorporating a certain degree of risk. A court hearing to consider the approval of the company's plan of reorganization is now scheduled for April 13. A Federal-Mogul spokeswoman did not return calls by press time