Allegheny Energy Supply 's second-lien loan broke into the par context late last week and was trading in the 100-100 3 / 8 range. The recent uptick comes in front of a Dec. 31, $250 million amortization payment on the company's first-lien loan obligation. With a large part of the company's first-lien loan being taken out, second-lien lenders "have a package that's a little more secure," noted one trader.
Allegheny restructured its credit facilities last February into a $2.4 billion loan. The new loan included a $987.6 million term loan that is secured by a second-lien priority. The loan refinanced existing company debt and letters of credit. The new facility also included a $420 million "B" loan of "new money." This loan is secured by a first priority-lien. The first-lien loan has a $250 million amortization payment at the end of December with the balance of the loan coming due in September 2004. Allegheny has obtained waivers on its loans for breaches concerning the filing of audited quarterly financial statements thorough Dec. 31. Allegheny has been engaging in efforts to reduce costs and strengthen it's balance sheet. Calls to Jeffrey Serkes , senior v.p. and cfo, were not returned by press time.