Western Wireless Corp.'s "B" paper traded as high as 91 last week with market players citing the company's stronger quarterly numbers and the possibility that the cellular service provider may join the pack of issuers tapping the market for fixed-rate, longer-term financing. There is a lot of liquidity in the high-yield market and deals are getting done, said one trader. The market for Western Wireless has not been this high since last spring.
Another trader noted Western Wireless filed a shelf registration, which also encouraged the speculation. The shelf filing was on April 14 for $500 million in securities, which John Stanton, Western Wireless' chairman and ceo, addressed during the company's recent earnings call. "We have recently filed a shelf registration offer. Filing the registration statement is not intended to signal that we intend to tap the capital markets immediately, but merely allows us to opportunistically raise capital," said Stanton. The company also noted that its domestic business leverage dropped to 5.5 times cash flow from 6.8 times cash flow since last year. It was the company's over-leveraged balance sheet in the face of a poor outlook on the wireless industry that put pressure on the name last year. The company has roughly $1.8 billion outstanding under its TD Securities-led credit. Steve Winslow, Western Wireless' treasurer, did not return calls by press time.