RCN Corp.'s bank debt has climbed up almost 20 points over the last month amid murmurs that a possible amendment could be in the works. Pieces of the company's "B" loan were said to have traded up as high as 80 two weeks ago before settling down in the 77-79 context. "It's no secret that our balance sheet is such that we would like to reduce the debt," said Jim Downing, a RCN investor relations spokesperson, declining to comment further on a possible amendment.
Although the company announced the completion of the sale of its central New Jersey cable systems to Patriot Media & Communications for $245 million, traders said the bank debt was not climbing from the news as the sale has been in the works for months. None of the proceeds from the asset sale will be used to pay down the bank debt because under the credit agreement, RCN only has to distribute proceeds in excess of $250 million to lenders, explained Downing. RCN currently has a $187.5 million revolver, a $187.5 million term loan "A" and a $375 million "B" piece. The market for the "A" term loan, which is in the low 80s, is slightly higher than the "B" loan due to its stronger amortization schedule, explained market players.