Owens Corning weakened two to three points last week as negotiations concerning asbestos legislation continue. Traders said the name changed hands as low as the 58-59 context early last week. One trader said there was information leaking out of the closed door meetings regarding the asbestos legislation, which is currently being held in the Senate. A spokesman for the company declined to comment on the trades or negotiations. The company has a hearing on Oct. 27 and is looking for court approval of its disclosure statement at that time, he noted.
The Congressional Budget Office (CBO) recently completed its cost estimate on the Asbestos Injury Claims Resolution Fund contemplated by the asbestos legislation. In the report, CBO projected a total cost of claims payments of around $136 billion over the next 50 years. "Assuming that the fund's administrator would use the authority in the legislation to collect contingent assessments from firms and insurers, CBO expects the fund would have sufficient resources to pay $136 billion in claims compensation over the next 50 years," the report states.
The CBO, however, notes that all long-term projections should be considered with caution. Under the bill, the primary source of support for the asbestos fund will be $108 billion in mandatory funding from companies with asbestos liabilities, their insurers and contributions from asbestos trusts formed under 524(g) of the bankruptcy code. The legislation also provides some contingency plans to ensure that funds are available if eligible claimants go beyond the $108 billion.