DDJ Capital, a Wellesley, Mass.-based distressed debt investor, is believed to have bought up the majority the SLI's bank debt at about 15. The firm is estimated to have bought about $200 million worth of paper, with the trades rumored to have been brokered by FleetBoston Financial, the lead bank on the credit. SLI is currently wading through a Chapter 11 bankruptcy process and has $365 million in pre-petition bank debt. Judy Mencher, co-founder and principal of DDJ, referred calls to a spokeswoman, who cited firm policy of not commenting on their investments or strategies. Calls to Fleet officials and Robert Mancini, SLI cfo, were not returned.
The lighting manufacturer filed for bankruptcy on Sept. 9 after the acquisitions it completed failed to be as profitable as anticipated. In addition, SLI's liquidity position was hurt by larger economic factors. In the second quarter of 2002, the company violated some of the covenants under its credit agreements and was unable to extend a forbearance agreement.
Allegiance Telecom softened last week from the 62-64 context to the 58-60 range after the company reported a consolidated EBITDA loss of more than $15 million for the fourth quarter of 2002. No trades could be confirmed. Levels for the company's bank debt have been climbing out of the 30s since December. For the bank debt to support the levels in the high 50s and low 60s, there has to be some kind of restructuring plan in the works, noted one dealer. In conjunction with its most recent amendment, the company has to reduce its debt by $1.275 billion by April 30. Thomas Lord, Allegiance cfo, could not be reached by press time.
Nextel Communications' "B" loan climbed up to heights unseen for the paper in more than a year, as the paper traded in the 97 1/8 range this week. "The trends for the business are good," noted one investor, explaining that the paper had been so depressed partly because of its association with the telecom sector. Standard & Poor's also took improved the outlook for the company from negative to stable, noted one dealer, explaining the rise in levels. "We're glad that the market is recognizing our progress," noted a company spokeswoman.