About $30 million of NRG Energy's bank debt was sold in pieces in the 41-41 1/2 context by a European bank last Thursday. This follows the trading of a $40 million piece that changed hands in the low 40s less than two weeks ago, according to traders. The trades mark an uptick in the market for the company's bank debt from the 36 level, where the paper was trading last month. In March, the paper rallied from the 30 level after NRG's bank debt steering committee and the majority of its long-term noteholders reached a tentative settlement with NRG-parent Xcel Energy. Under the terms of the agreement, NRG will receive a $752 million payout from Xcel in exchange for the release of all claims NRG has against Xcel (LMW, 3/31).
Explaining the uptick, one market player said, "People are bidding for anything energy." In addition, a fund managed by MatlinPatterson Asset Management has reportedly amassed a large position in the company's bonds. NRG is still working with an ad hoc committee of bondholders, the bank debt steering committee and Xcel on a consensual plan of reorganization. According to company filings, if NRG is unable to restructure through an exchange offer or reach another out-of-court solution, the company will seek to implement a reorganization plan through Chapter 11 bankruptcy. A company spokeswoman said there have been no new developments with the company's bid to restructure and declined to comment on the identities of the major creditors. ABN Amro leads NRG's $1 billion, 364-day revolver.