Mirant Corp.'s bank debt continued to trade actively this week, sinking back into the 60s as the maturity on its $1.125 billion revolver looms and the company has yet to complete its $5.3 billion debt overhaul. Traders said the '03 revolver maturing next week traded as low as the 62 1/2 - 63 range and by Wednesday afternoon was bid at 61 1/2. Last week, the paper was quoted in the 72-74 range.
The company's $1.125 billion revolver maturing in July 2005 trades at roughly a five-point premium to the '03 facility and changed hands at the 68 level on Wednesday "It's hard to peg because it's very volatile," said one trader of the loans. A lot of the trading came from inter-dealer activity, said one dealer, noting that there was some supply coming out of banks. But another explained that much of the selling came from original lenders.
A bank meeting held on Tuesday did not have a drastic effect on the price of the loan, but it did leave the public markets questioning what is going on. Mirant is trying to win support for its restructuring plan that will include giving debt holders more security and exchanging some old debt for new. The company has stated that it could potentially resort to a pre-packaged plan of reorganization. "You [have] got to think something gets done. [But the banks are] going to play hard ball till the 11th hour," one trader speculated. Calls to a Mirant spokesman were not returned by press time.
Owens Corning's bank debt continued to see-saw this week on pending asbestos legislation. Tuesday morning, the paper was quoted in the 71-73 range and then traded up to the 75-77 context. One dealer explained that later in the day, the price of the loan had settled somewhat into the 74-76 range after investors believed the market had run up too high.
The Senate Judiciary Committee is scheduled to resume the mark-up session for The Fairness in Asbestos Injury Resolution Act of 2003 on Thursday. The bill contemplates creating a national trust to fund asbestos liabilities, a move which is expected to save asbestos plagued companies billions of dollars. Meanwhile, Owens Corning was scheduled to present a revised disclosure statement to its creditors by June 30, but it could not be determined if a new document was completed. Calls to an Owens Corning spokesman were not returned by press time.