A $10 million piece of Mirant Corp. was rumored to have traded at the 79 level a week ago last Friday, although some dealers doubted that the trade went off. Traders said Mirant bank debt rarely changes hands. There was a wide discrepancy regarding the levels of the bank debt piece before the rumored trade with market players noting the paper was quoted anywhere from the low 60s to the mid-to-high 70s.
Mirant has a fully drawn $1.125 billion, 364-day revolver that was termed out last year and now expires in July. The company is believed to be working toward the refinancing of the Credit Suisse First Boston-led line, but no details have emerged yet. The company has admitted that a new deal would likely be smaller with a higher price and more restrictive terms. Recently, Moody's Investors Service has downgraded Mirant's senior unsecured debt from B1 to Caa2 as the company faces debt obligations, high leverage and low free cash flow. The rating agency expects that a new bank deal will likely be secured. Harvey Wagner, Mirant cfo, could not be reached by press time.