SpectraSite's bank debt got a boost after its holding company, SpectraSite Holdings, announced that it is pursuing a prepackaged bankruptcy plan to clean up the tower company's balance sheet. Traders said a $3-5 million piece changed hands in the 84-85 range, up from the low 80s last week.
The company's $1.1 billion facility was amended at the end of August and the outstanding amount was reduced by $215 million, but the credit was not changed in this round of reorganization, noted Tabitha Zane, v.p. of investor relations. The bankruptcy plan calls for bondholders owning $2 billion in senior notes to swap their exposure for 100% of the stock in the reorganized company. The plan also will cut annual interest expenses by approximately $200 million.
The bank debt of U.S. Can is believed to have traded on Tuesday at the 82 level, continuing the downward trend that the paper has experienced over the past couple of months. Traders said the company is facing a number of issues, including high leverage. In addition, investors were spooked after U.S. Can CEO Paul Jones resigned. Calls to John Workman, coo, and Sandra Vollman, senior v.p. of finance, were not returned by press time.
Asbestos names bounced up roughly two points after Armstrong Holdings filed its reorganization plan, paving the way for an emergence from bankruptcy. Market players said Armstrong was able to get support from its asbestos claimants, which was encouraging for a number of companies that have been plagued by asbestos issues for so long. Indeed, a few small pieces of Federal-Mogul traded in the 58-59 range earlier this week.
And finally, Nextel Communication's bank debt broke into the 90s this week with trades taking place at 91 and 90. "If the bonds keep rallying, then there is no reason for the bank debt not to get stronger," one trader said, explaining that the company had been retiring $2.6 billion in debt by swapping the bonds for equity. Calls to Nextel were not returned by press time.