The bank debt for Hagemeyer, the Netherlands provider of business-to-business services, sunk into the low 70s on reports that the company could potentially pare down its bank debt and pursue some type of debt-to-equity swap as part of its efforts to recapitalize, explained one trader. Irma Bergervoet, investor relations for Hagemeyer, declined to comment beyond a written statement issued on October 28. The alternatives considered by the company "involve a restructuring of the company's debt, combined with a required increase of the company's share capital with several hundred euros," according to the statement.
In late October, the bank debt for Hagemeyer dropped to the 75 context as the company announced that it had obtained standstill agreements for defaults on its credit lines until November 9. The company has now obtained an extension on its standstill agreements until February 9. The paper recovered somewhat from those levels, creeping up toward the 80 level, before the recent drop. The company's subordinated debt has also dropped on the restructuring speculation. The debt had been trading north of 40 but sunk to the teens to 30 context on the reports that a substantial portion of the subordinated debt would also be cut back, traders said. Hagemeyer has been working to recapitalize and secure new liquidity since earlier this year.