Owens Corning was softer again this week as the company began litigation in the confirmation of its plan of reorganization on Tuesday. The bank debt was a few points weaker at 64-67, according to traders. No trades could be confirmed. "Owens Corning has been on again and off again and now it's off again," said one buysider, noting that the market for the company's bank debt has been volatile throughout the bankruptcy process. According to company filings, disagreements raised by creditors concerning the plan will be addressed by the litigation as a part of the confirmation process. Calls to counsel representing Owens Corning were referred to a spokesman, who did not return calls by press time.
Pieces of Dynegy's new loan for its Dynegy Holdings subsidiary were trading last week with the new $1.1 billion revolver and the $200 million "A" term loan moving as a pro rata piece in the 94 1/2 - 96 context. No trades could be confirmed, however, for the company's new "B" piece. The market for the "B" tranche was quoted in the 93-95 context. The "B" loan only has a second priority lien on Dynegy Holdings' assets, compared to the pro rata portion, which has a priority lien. While the pro rata replaces Dynegy Holdings' existing $900 million and $400 million revolver, the "B" loan replaces a Polaris communications lease. Calls to Nick Caruso, Dynegy cfo, were not returned by press time.
Tesoro Petroleum's new bank deal was trading in the 100 3/8 - 101 context after the new deal broke into the secondary market last week. With a non-call provision in the first year and 103 call protection for the second, one trader thought that the bank debt would be trading at more of a premium. A dealer commented that the company "is not out of the woods yet." He said although the new deal has a decent interest rate and call protection, the old deal traded in the mid 90s before the refinancing got underway.
Finally, creditors to Hayes Lemmerz reached a compromise that will allow the company to go forward with its reorganization after some last-minute legal threats (LMW, 4/7). While the bank debt holders were able to eke out a little more value for their recovery, noteholders did not feel that the amount was enough to pursue litigation. The compromise agreement will allow Hayes to emerge efficiently from bankruptcy and concentrate on its business, which means more to noteholders, commented one noteholder. The bank debt was quoted in the low 80s, but no trades could be confirmed. "We're pleased that our creditors reached a quick, equitable resolution of their issues. We look forward to completing our final phase," said a company spokeswoman.