Mirant Corp. bank debt ticked up roughly a point after the company announced that it had reached a settlement with Pepco Holdings. The '03 bank debt was quoted in the 52-53 range, the '04 in the 53 1/2-55 context and the '05 around the 75-77 level. Mirant and Pepco will restructure power purchase agreements rather than rejecting them as a part of Mirant's bankruptcy process.
The potential to reject the Pepco contract has been pumping up Mirant's bank debt since early September. At that time, the '03 paper was being quoted at the 45-46 level, the '04 around the 45 1/2-47 context and the '05 in the 68-70 range (LMW, 9/8). The new agreements between the companies will provide "additional value to Mirant in the form of higher energy prices," according to a company statement. A spokesman did not return calls by press time.
Federal-Mogul has been slowly creeping up with the bank debt now trading in the 81-82 range. Several weeks ago the name was quoted in the mid-70s. The reason behind the slow rise could not bet ascertained. There was a hearing in the bankruptcy court on Wednesday, but one trader said it was a non-event. A spokeswoman did not return calls by press time.