The bank debt of the former 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 29-31 range. A $60 million piece was said to have been sold, but whether the piece was sold with or without litigation rights could not be confirmed. The litigation refers to lawsuits bank debt holders have against Susan Mayer, WorldCom's former treasurer, and the bank debt holders' "constructive trust claim" against the company for terming out its 364-day credit facility soon before announcing its fraud. A spokeswoman for MCI declined to comment on the trades or to elaborate on the creditor settlement.