Energy names were among the credits that were sparked by strong investor buying fueled by the "January effect." Reliant Resources' term loan, which was only a touch stronger in the 96-971/2 range after the company tapped an escrow account to pay down $917 million of bank debt, surged to the 99-991/2 range. The company's revolver also continued to climb throughout last week, first into the 93-95 range and then upward into the 941/2-96 context. Dealers noted that the bank debt paper was still relatively cheap compared to Reliant's bonds. Calpine Corp.'s second lien loan was also actively trading in the 99 range.
Even the bank debt of Mirant Corp. was stronger last week with the company's lowest valued revolver, the '03 paper that was set to mature last summer, trading up into the 62-64 range. Over the last month, the loan has been crawling out of the mid-to-high 50s. Immediately following the company's bankruptcy filing in July, the paper was quoted at half its current value in the 35-38 range. A U.S. District Court recently ruled to deny Mirant's motion to reject an agreement between the company and Potomac Electric Power Co. Mirant plans to appeal that ruling (LMW, 1/5).