Hayes Lemmerz International's bank debt bumped up a few points after the company filed its plan of reorganization last week. A piece of the company's bank debt traded in the 82 context. There was a rumor that paper traded as high as 84-86, but several dealers said that those levels were too high.
Unsecured creditors are disputing claims the bank debt holders have to the equity in one of the company's foreign subsidiaries, according to one official close to the situation. Hayes has assets both in Europe and North America, but European assets make up more than half of the company's current value. Unsecured creditors claim that the bank lenders did not perfect their security interests specifically in one European subsidiary that was not a part of Hayes' current bankruptcy process, said the official. As a result, the unsecured creditors believe that a portion of the bank debt should become pari passu with the unsecured claims, he added. Calls to James Yost, cfo, were not returned by press time. Under the company's current reorganization plan, bank debt holders would receive an undetermined portion of the company's new $425 million senior notes and common equity. A large part of that package would be made up of equity, noted the official.