Credits in the midst of restructurings slid downward last week under pressure from the market. Traders said asbestos names were particularly weaker with Owens Corning quoted down into the 661/2-671/2 range from around the 70 level. A few market participants said the cause of the decline was less optimism about the possibility that the asbestos legislation would pass Congress in this election year. But one buysider noted that several creditors believed for some time that the legislation would not pass.
Moreover, Judge Alfred Wolin's recusal hearing is set to begin next month. A handful of lenders brought a motion to the court late last year to remove Wolin from the asbestos bankruptcy cases, claiming he had appointed consultants that had conflicts of interest. Wolin has been considered a creditor-unfriendly figure in the bankruptcy cases, market players said. An Owens Corning spokesman declined comment.
Other restructuring names including Exide Technologies and Leap Wireless were also softer last week falling with the stumbling equity markets. Lenders are slated to receive the majority of common stock in both companies under their respective reorganization plans and are therefore considered back-end equity plays. Exide was trading in the 73-741/2 context and Leap slipped to the 89-91 range.