Tranches under the new $2.4 billion financing for Calpine Generating Co. weakened even further in the secondary market after Standard & Poor's announced its ratings for the new financing. While the first-lien loan was able to largely maintain its 100-100 1/2 trading levels from last week on S&P's B+ rating, the second-lien and third-lien pieces slipped after they were assigned B and CCC+ ratings, respectively.
The second-lien dipped from the 96 1/2-97 1/2 context to the 94 1/2-95 1/2 range. The third-lien sunk from the 97 3/4-98 3/4 level to the 93-95 context. The third-lien is entirely floating-rate note paper. Calls to Rick Barraza, Calpine's senior v.p. of investor relations, were not returned by press time.
Meanwhile, Nextel Communications bank debt did not budge despite being upgraded to investment grade by S&P this week. Traders said market technicals held the price steady. The paper is said to be trading in the 100 7/8-101 range.
Late last year, Nextel restructured its credit facility, which is held at its Nextel Finance Co. subsidiary, in an effort to reduce interest costs, extend maturities and pay down approximately $575 million in the principal amount under the credit facility. The company used cash on hand and proceeds from a new $2.2 billion facility to take out the existing $2.775 billion loan. The new loan took pricing down to LIBOR plus 2 1/4%. Calls to a spokeswoman were not returned by press time.