Werner Holding Co.'s bank debt also ran up on the wings of the market rally. Traders said the loan was quoted as high as the 93-95 range, up from the low 90s, where the paper was quoted early last week. The bank debt was also said to be running up with the company's bonds. The bank debt recently climbed out of the high 80s range following Werner's announcement that it had entered into a strategic alliance with Lowe's Companies (LMW, 1/5).
But the Lowe's announcement was coupled with the company's decision to discontinue supplying Werner branded products to The Home Depot. "The Home Depot no longer places an acceptable premium on the Werner brand, its category management, nor distribution capabilities," the company stated in a presentation to bondholders last week. One loan trader, however, questioned whether the alliance with Lowe's compares favorably to its contract with Home Depot. The company did not discuss the details of its Lowe's alliance during the investor presentation, but did admit that the absence of Home Depot business would have a significant impact on the company in the near term.
Werner is now pursuing restructuring and downsizing initiatives. Calls to Larry Friend, Werner's v.p., cfo and treasurer, were not returned by press time.