Conseco's new bank debt, which will be a part of the recovery package going to lenders, is beginning to trade on a when-issued basis as the company is poised to emerge from bankruptcy. The bankruptcy court confirmed the company's sixth amended joint plan of reorganization on Tuesday clearing the way for an imminent emergence. Traders said the loan is trading in the 99 1/2 - 99 5/8 context. They also said the former credit facility had been quoted as high as the 104 1/2 -105 context, but has ceased to trade.
As a part of the reorganization plan, holders of bank debt claims will receive a new $1.3 billion credit facility, comprised of a $1 billion "A" loan and a $300 million "B" piece. Bank of America is the agent on the deal and J.P. Morgan holds the joint-lead arranger and joint book runner role with B of A. Calls to a company spokesman were not returned by press time.
The bank debt of WorldCom, now called MCI, has been trading actively this week as the company reached an agreement with dissenting creditor groups for its plan of reorganization. This settlement removes one of the obstructions to MCI's emergence from bankruptcy. The company's bank debt is now trading up toward its final recovery, which is estimated to be about 36 cents on the dollar.
Traders said the bank debt, with rights to litigation proceeds, was changing hands in the 31-32 range. The bank debt without litigation rights was trading in the 30-31 range. The litigation refers to law suits bank debt holders have against Susan Mayer, WorldCom's former treasurer, and against the company for terming out its 364-day credit facility soon before the company announced the massive fraud. One trader said about $70 million of the paper changed hands on Monday, prior to the announcement. Calls to company officials were not returned by press time.