A group of dissenting lenders for Hayes Lemmerz are said to be meeting with the bankruptcy judge this week to oppose the company's current plan for reorganization. The group is trying to get more value for the bank loan holders (LMW, 2/2), but the levels of the company's bank debt have remained in the 82 1/2 -83 1/2 range. Under the first amended joint plan of reorganization, lenders holding roughly $790 million in claims would receive a pro rata portion of the pre-petition lender's payment amount, 15 million shares of common stock in the reorganized company, as well as a portion of the adequate protection payments. Calls to the company were not returned by press time.
Market players expect allocations for Crown Cork & Seal's new credit to come out this week. Traders anticipate the company's $500 million "B" term loan to trade above par. The company is currently pursuing a refinancing plan that also includes a $550 million revolver and $2.1 billion in senior secured notes. One trader explained that the paper was likely to trade up because the company had pared its bank debt in exchange for senior notes, so the supply of paper relative to demand is less. The company's current bank debt is quoted just under par. Calls to Timothy Donahue, senior v.p. of finance, were not returned by press time.
Meanwhile, rumors abound that an amendment sought by Broadwing has not been voted through yet. Market players suggested one sticking point was extending the maturity on the revolver by 16 months. Banks on the revolver are holding out for higher pricing than is currently on the table, said one trader. Pricing on the revolver would be increased to LIBOR plus 4% under the plan, but the company must receive 100% approval for the amendment.
Broadwing is working toward the amendment in conjunction with a five-point restructuring plan that will allow the company to deal with its burdensome maturities and amortization (2/2). Broadwing needs to secure the amendment so that it can tap a Goldman Sachs commitment for $350 million of junior debt. Bank of America is the syndication agent on the credit and Citigroup is administration agent. Credit Suisse First Boston and Bank of New York are co-documentation agents. Calls to the company were not returned by press time.