Fleming Companies' pre-petition bank debt levels held their ground after the company filed for bankruptcy last Tuesday. Bank debt players said the "B" piece traded in the low 80s. Holders of the company's 101/8% senior notes were not as fortunate, as the market for their securities dropped into the high teens from the mid-20s two weeks ago. Dealers and buysiders said adequate protection, good asset value, and the strength of the company's retail distribution business were some of the factors propping the bank debt levels. Some are concerned, however, with how vendor claims will be treated in the reorganization process.
Meanwhile, Deutsche Bank and J.P. Morgan are planning to syndicate Fleming's $150 million debtor-in-possession facility later this month. A banker familiar with the deal said price talk on the DIP--most likely a borrowing base revolver--will be in the LIBOR plus 11/2% range. The supplier of consumer packaged goods has already secured a commitment from its existing lenders for a $50 million interim DIP loan as a bridge to the more permanent financing. Fleming filed for Chapter 11 last week after running into a liquidity crisis. The company had taken a blow in January when Kmart and Fleming decided to terminate their supply agreement. Officials at Deutsche Bank declined comment and J.P. Morgan and Fleming spokesmen did not return calls.