Charter Communications continued to climb this week on news that the company is pursuing an amendment that will give lenders an extra 50 basis points for their commitments. The term loan "B" traded in the 93 3/4 - 94 1/2 range on Monday before settling back down into the 92 3/4 - 93 3/4 context. Market players said the name also got a boost from asset sales, which set the value of each subscriber between $3,000-3,500. There continue to be rumors in the public markets that some type of debt to equity swap could be in Charter's future, but no concrete details could be determined.
Owens Corning continues to be volatile this week. Paper was said to have traded at 55 before shooting up to the 56 1/2 - 58 context. Traders said a rumor that bank debt lenders would receive a recovery of 60-70 cents on the dollar circulated through the market. An attorney involved with the case said the debtor is still pursuing a settlement with its creditors.
Most recently, Credit Suisse First Boston as agent to the lenders filed an objection to the company's current plan of reorganization. "The plan seeks to impose unrealistic and legally unsupported solutions to the two major issues in this case - the 'intercreditor' dispute centering on substantive consolidation and the valuation of Owens Corning outstanding tort liability," states the objection. Under the recently proposed "Fairness in Asbestos Injury Resolution Act of 2003" as currently filed, Owens Corning's multi-year funding obligations to a national trust would be less than $1 billion, stated the objection. This compares to the original estimation of asbestos liabilities of approximately $16 billion. At a court hearing Wednesday morning, however, the bankruptcy judge declared that the confirmation of a plan would not be postponed based on pending legislation, said an attorney present at the hearing.
Global Crossing's bank debt was a touch stronger this week after XO Communications announced its offering to acquire the company. The offering would provide a slightly larger recovery via equity to bank debt holders. The bank debt is quoted in the 21-22 context up from the 20 3/4 range, where a $5 million piece traded last week. Traders said the name was stronger because XO's interest in the company gives creditors reassurance that if the company's current plan with Singapore Technologies Telemedia falls through, there are alternative buyers on the sidelines. A Global Crossing spokeswoman declined to comment.