Global Crossing is actively trading in the street this week with pieces of all tranches trading flat in the 18-19 context. The latest movement comes as reports indicate that IDT Corp. will make a $255 million bid for the company. Although the bankruptcy court has already confirmed a reorganization plan whereby Hutchison Telecommunications Limited and Singapore Technologies Telemedia would invest $250 million in exchange for a 61.5% ownership position, this deal may come under fire due to national security concerns.
"The deal is troubled," said one buysider, adding that it's a toss up whether the Asian investors' deal will be consummated. Other lenders said it was too soon to tell how the current reorganization plan would be affected. Calls to Dan Cohrs, Global Crossing cfo, were referred to a spokeswoman, who noted that the company was looking to move ahead with the confirmed plan.
RCN Corp. is generating noise in its pursuit of an amendment to its credit facility and market players have mixed feelings about the appropriate levels for the company's bank debt. According to both buysiders and dealers, the term loan "A" was being quoted anywhere from the 80s to the 75-77 to the 72-75 ranges and the "B" was quoted within the 69-74 context. No trades could be confirmed due to the choppy levels.
RCN is said to be pursuing the amendment so that it can buy back its bonds. In exchange, the company will use its unfunded revolver, according to investors. Levels for the term loan "B" have seen some pressure, because those holding the institutional tranche would prefer to receive a paydown, noted buysiders. The amendment is said to also include some covenant tweaks and votes are due by March 6. "It's no secret that our balance sheet is such that we would like to reduce the debt," said Jim Downing, an RCN investor relations spokesperson, last week (LMW, 2/17). He declined to comment on the amendment.
Microcell also is gaining attention this week as the bank debt climbed from the low 70s into the 76-80 context with a piece of bank debt trading in the 77 context. Dealers said investors are anticipating a faster than expected restructuring as the company filed its plan of reorganization last Friday. The bank debt has rebounded over the last three months. In November, the paper climbed out of the 20s into the 35-40 range as lenders anticipated a restructuring that would be beneficial for those holding the bank debt (LMW, 11/11). Jacques Leduc, Microcell cfo, could not be reached by press time.