After surging up out of the 70s since the end of last month, Mirant Corp.'s bank debt has lost some steam. Small pieces of the company's revolvers traded in the 83-85 context last week, traders said. The bank debt ran up as high as 852/3-881/3, according to LoanX, before this recent slouch. Lenders are getting frustrated with the company's slowness in restructuring its debt maturities and the volatility of its bank debt is attributed to behind the scenes negotiations. Mirant has not completed a deal in this market where everything is getting done quickly, said one trader. The company is looking to restructure $5.3 billion of debt maturing through 2007.
In order to complete the restructuring process quickly, a provision has been placed on the company's bank debt concerning those who can vote on changes. The bank debt paper can still trade, but only the firms holding the paper at the time that the provision was put in place can vote on the restructuring. Most of the original banks still own the paper, noted one trader. A company spokesman declined to elaborate on the specifics of the restructuring.