Nextel Communications bank debt has been ticking up since the company filed a shelf registration on March 27 for up to $5 billion in new securities. Market players speculate that the digital mobile phone operator could be one of the seasoned issuers poised to tap the capital markets for new financing. "This shelf will provide Nextel with the means to refinance our balance sheet at the appropriate time and in the most cost-effective manner," said Paul Saleh, Nextel's cfo, during the company's conference call this week. The company's "B" piece traded as high as 98 1/4 following the call before slipping back into the 97 1/8- 97 7/8 context. Before the earnings call, the tranche was trading in the 97 - 97 1/2 range.
Traders said $10-15 million pieces of Federal-Mogul Corp. bank debt changed hands this week as the company filed its disclosure statement and released its quarterly earnings report. The trades were completed in the 75-76 context and the sellers were said to be banks looking to cash out. By late Tuesday, the paper was bid at the 76 level. The earnings were in line with expectations, said one dealer. Federal-Mogul has approximately $1.6 billion in pre-petition bank debt claims and holders of these claims will receive a combination of six-and-a-half year senior secured term loans and 11-year junior secured paid-in-kind notes. Calls to the company's financial officials were not returned by press time. J.P. Morgan leads the Federal-Mogul deal.
Finally, a $40 million piece of NRG Energy traded in the low 40s toward the end of last week, according to market players. This latest trade marks an uptick in the market for the company's bank debt from the 36 level, where the paper was trading last month. This followed an announcement that NRG had reached a settlement with its parent, Xcel Energy. Under the terms of the agreement, NRG will receive a $752 million payout from Xcel in for the release of all claims NRG had against Xcel (LMW, 3/31).
Explaining the uptick, one market player said, "People are bidding for anything energy." NRG is still working toward a restructuring and reports indicate that a fund managed by MatlinPatterson Asset Management has amassed a large position in the company's bonds. A spokeswoman from NRG said there have been no new developments with the company's bid to restructure and declined to comment further. ABN Amro leads NRG's $1 billion 364-day revolver.