Activity in the loan market began to slow down last week as the lack of sellers left buyers without much paper to choose from. But there were some names that were still changing hands. Mirant Corp. bank debt has been one of the most volatile names in the market. The debt inched up about four points on information regarding Mirant’s Philippine operations before falling off slightly when that information was found to be outdated.
On Tuesday, Ed Bautista, the head of Mirant’s Philippine operations, commented that the initial public offering of that operation would likely raise $325 million. The valuation offered under that scenario was much higher than investors had expected, leading them to apply that new valuation to Mirant’s operations and bid the debt upward, explained one dealer.
But the run-up was short-lived, Mirant released a statement on Wednesday noting that “those valuations are outdated and the company would not be able to provide new financial data until an in-depth valuation occurs.” Still, Mirant’s ’03 bank debt was left higher compared to last week with market players quoting the name in the 66-67 range. A Mirant spokesman declined to comment beyond the statement.
A few facilities linked to Enron Corp’s off-balance sheet vehicles were said to have changed hands last week. A $10 million piece related to Choctaw Investors traded around the 75 3/8 range and $10 million of debt linked to Zephyrus Investment changed hands in the 37 range. The facilities were up significantly from about 64 in mid-November on the Choctaw piece and the 31 context on Zephyrus, according to one loan market source. But another dealer said it was unclear whether these facilities were trading higher or lower because pieces of the debt had not changed hands for sometime.