Exide Technologies bank debt has been slightly stronger over the last month as the company nears emergence from bankruptcy. The company's term loan "B" was said to have traded in the 63-64 context. This is up from the 57 591/2 context where it was quoted a month ago, according to LoanX. One trader said there are a lot of potential buyers of the paper, but not many sellers. He noted that increased mergers and acquisition activity in the sector is adding to interest in the name.
Most of the bank debt is concentrated among four players whose intention is to own the equity, said one trader. The top four holders of bank debt claims include Angelo Gordon & Co., BlackRock, Citadel Investment Group and R2 Investments. These lenders and others have the option to receive two different packages under the company's reorganization plan. Under election A, lenders will receive equity in exchange for both their pre-petition domestic and pre-petition foreign secured claims. Under election B, lenders would receive equity for their pre-petition domestic secured claims and could elect not to transfer their pre-petition foreign claims to equity but instead partake in an amended pre-petition foreign credit agreement.
Lenders had claims to some of Exide's foreign subsidiaries that were not a part of the bankruptcy proceedings and therefore the company could not compel the lenders to convert the claims against the foreign subsidiaries into equity, explained Matthew Kleiman, a partner at Kirkland & Ellis and an attorney for Exide. Kleiman said the company expects that most of the lenders will choose election A, which is considered by some to be the more "economically beneficial" choice. Calls to Biagio Vignolo, Exide's cfo, were referred to a spokesman, who could not be reached by press time.