Roughly $20-30 million of Kmart's bank debt changed hands last week as the company rushed to file a disclosure statement Friday, as Loan Market Week went to press. Dealers said pieces of the company's 364-day revolver and three-year facility changed hands in the 34-35 range. The buzz suggested that Edward Lampert of ESL Investments was coming back to the table offering to help fund a buyout of the company's bank debt, albeit with a few tweaks to the original agreement. Calls to Lampert were not returned by press time.
A Kmart spokesman declined to comment on the negotiations. He said the company was intending to file its plan of reorganization and disclosure statement as LMW went to press. The company wanted to file the plan regardless of whether it reached a consensus with its creditors. It will have to amend that plan as the negotiations continue, he said.
Two weeks ago, Kmart's bank debt paper bounced back up into the 32-33 range from the mid-20s as the company announced that it is working toward completing an all-equity reorganization plan. At that time, the company committed to filing a reorganization plan and disclosure statement by Jan. 24. Albert Koch, Kmart cfo, and Ron Hutchison, Kmart's chief restructuring officer, could not be reached by press time. John Butler, an attorney with Skadden, Arps, Slate, Meagher & Flom and counsel to the debtor and Richard Cieri, an attorney from Jones, Day, Reavis & Pogue representing the financial creditor's committee, did not return calls seeking comment. Counsel representing the banks and unsecured creditors committee declined to comment.