Mayflower Corp.'s bank debt changed hands in the mid-to-low 50s last week as market players anticipated downward pressure on the name. A £4 million piece of the loan is believed to have traded around the 55 range, but levels for the bank debt were left in the 52-53 context last week. A £15 million piece is also believed to be up for sale, but it could not be determined whether that paper traded. The company designs and engineers bus and coach chassis, car bodies and trucks cabs, and creates environmental engines and offshore windfarm technology.
Mayflower anticipates that year-end profit is likely to be below market expectations and is currently in discussions with its lending group. The company renegotiated its credit facility in December, putting in place a £160 million loan led by Credit Suisse First Boston and The Royal Bank of Scotland. The loan syndicate originally included 17 firms. Last week, however, Mayflower announced that it had obtained standstill agreements from its lenders, who have agreed to provide additional facilities to the company while the parties conclude their negotiations. It was unclear what the result would be from those negotiations. Calls to Mayflower officials were referred to a spokeswoman, who did not return calls by press time.
Preliminary results for the year ended Dec. 31 are expected in late March. Mayflower explained that soft markets, increased competition and uncertainty about economic recovery caused the shortfall in results. Mayflower has said the majority of this shortfall has occurred in its TransBus International unit. The TransBus unit is 70% owned by Mayflower and 30% owned by Henlys Group, a bus and coach manufacturer. Henlys' bank debt has also come under some recent pressure after the company announced that its results would be below market projections. The paper was quoted in the 70s range last week, but no trades could be confirmed. Calls to Henlys officials were also not returned.