American Cellular Corp.'s bank debt was stronger last week as the market buzzed that a debt restructuring plan is taking shape. The details of the plan could not be determined, but one trader noted that there was a meeting last Thursday to discuss the deal. The company's bank debt has ticked up out of the high 80s and into the low 90s context over the last couple of weeks. The "A" loan was said to be trading in the 92 range and the "B" loan was bid in the 90 context, last week.
In the first quarter of 2003, the company was required to maintain a total debt leverage multiple of 7.5 times, but American Cellular has been in violation of its total debt leverage ratio covenant since June 30, 2002. The company is in negotiations with its lenders and certain bondholders concerning a potential restructuring. One buysider suggested that some type of debt to equity swap could be in order. American Cellular is a joint venture between Dobson Communications Corp. and AT&T Wireless Services, which both own 50% of the company. Dobson manages American Cellular. Calls to Bruce Knooihuizen, Dobson's executive v.p. and cfo, were not returned by press time.