Choice One Communications bank debt has been crawling up toward the 40 range since the company reported better financial results for the second quarter. A $10 million piece of the bank debt was said to have traded around the 39 level this week and about $30-40 million is believed to have changed hands in the 36-39 range last week. Prior to the recent activity, traders said the paper last traded in the 32 context about a month ago.
Although the bank debt has improved over the last month, Choice One is still at risk for an in-court restructuring, according to Standard & Poor's. "With accessible liquidity of about $12.6 million and weak free cash flow prospects, this competitive local exchange carrier is at risk of filing for bankruptcy in the very near term in the absence of additional new capital," notes S&P in a recent review of the telecommunication industry. Calls to Ajay Sabherwal, Choice One's executive v.p. and cfo, were not returned by press time.
Meanwhile, the market for Venture Holding's bank debt is hovering in the 69-72 range as the company, its bank-debt holders, and Venture founder Larry Winget hammer out terms for the company's restructuring. No trades could be confirmed. James Butler, Venture Holdings' cfo and general counsel, said the parties have agreed to a preliminary term sheet, but the term sheet has not yet been disclosed to the public. While the parities are committed to working out a resolution, there are still some "significant hurdles" that need to be overcome, he added. Butler declined to provide a timeline for when a reorganization plan would be completed.